Michigan Sen. Carl Levin (D), who chairs the Senate Permanent Subcommittee on Investigations, said at the time of the loss that the draft version of the Volcker Rule had a loophole so large “a Mack truck could drive right through it.” Now, according to Bloomberg, he and Sen. Jeff Merkley (D-OR) will push regulators to close loopholes in the rule and strengthen it to prevent trades like the London Whale loss, which could have caused larger market problems at smaller or more vulnerable banks.
At the same time, some Republican senators are still pushing to further weaken the rule, which was watered down so much by bank lobbyists and Republicans that its namesake, former Federal Reserve Chair Paul Volcker, said he didn’t like it.
Massachusetts Sen. Scott Brown (R) cast the deciding vote for the Dodd-Frank law, but not before he successfully weakened the Volcker Rule by inserting certain exemptions for big banks. Since then, Brown has continued to lobby regulators to take even more teeth out of the rule. Brown’s efforts amount to “significant loosening of the regulations and [are] absolutely serving the interests of people who do not want to have meaningful reform,” according to Simon Johnson, and MIT professor and reform advocate.