On December 13th, the House Financial Services Committee convened what is likely to be the last hearing of this Congressional session for the purposes of seeking "alternatives" to the Volcker Rule. The Volcker Rule, as Iâ€™ve written previously for The Nation, is a piece of Wall Street reform with a crucial purpose: to create a firewall that bars banks that enjoy FDIC insurance from risky, speculative gambling. On Wall Street, gambling with the firmâ€™s money is known as proprietary or â€śpropâ€ť trading. This is an important rule to get right, and its final version has been delayed far too long. And unfortunately, the aim of this hearing was not implementing the regulation, or even about exploring alternatives to the Rule, but rather dragging things out to the benefit of the banks.
The hearing put on display everything weâ€™ve come to expect from our most beholden members of Congress. Many questions had clearly been penned by bank lobbyists, and a largely hostile reception greeted the two witnesses, William Hambrecht and Dennis Kelleher, who dared to defend the reforms. But three Representatives in particularâ€” Chairman Spencer Bachus (R-AL), Rep. Shelley Moore Capito (R-W.Va.), and Rep. Jeb Hensarling (R-TX), the incoming Chairman of the Committeeâ€”stood out, handing over their pulpit to a litany of misrepresentations about the effect of the rule. [Continued at the Nation]