‘We will now have to carefully examine the final rule to consider the impact on liquidity and market-making,’ Hirschmann says
WASHINGTON, D.C.—U.S. Chamber of Commerce Center for Capital Markets Competitiveness (CCMC) President and CEO David Hirschmann issued the following statement today following votes by the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Commodity Futures Trading Commission to approve the Volcker Rule:
“We are disappointed that regulators may have sacrificed an effective process that could have avoided adverse consequences for Main Street businesses. The Chamber asked regulators to re-propose the Volcker Rule in order to identify and fix unintended consequences before the Rule goes into effect. A re-proposal would have ensured a sound rulemaking process. We will now have to carefully examine the final rule to consider the impact on liquidity and market-making, and take all options into account as we decide how best to proceed.
“The Volcker Rule is the most complex rule stemming from the already convoluted Dodd-Frank law, and its impacts will have a significant effect on the broader economy. Since it was first proposed, we have warned that the Volcker Rule may harm the ability of businesses to raise the capital needed to grow and operate. The Volcker Rule may shut Main Street businesses out of some markets, raise the costs of capital, and place the United States at a competitive disadvantage in a global economy. That is not a winning formula for sustained economic growth and job creation.
“Over the past couple of years the Chamber submitted more than a dozen letters and studies to the regulators outlining the potential negative impacts of the Volcker Rule on corporate treasurers. Recently, several regulators publicly expressed interest in expanding the rule to include portfolio hedging, a substantial change from the draft rule proposed in 2010. Since the comment period on the proposed rule closed, new market participants appear poised to be designated systemically important and, therefore, would be subject to the rule. Those companies should now be allowed to publicly comment on the Rule, given its potential to significantly impact the way they conduct business.”
Since its inception in 2007, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.