House Financial Services Chairman Spencer Bachus (R-AL) — who said that, in his view, Washington’s role is “to serve the banks” — has put out a call to the financial industry to suggest “legislative alternatives” to the Volcker Rule, which is aimed at reining in banks’ risky trading:
A top Republican lawmaker on Tuesday asked the financial industry to suggest alternatives to the hotly debated Volcker rule in advance of a planned fall hearing.
Representative Spencer Bachus urged investors and market players to submit ideas to the House of Representatives Financial Services Committee before September 7, saying that the rule as currently proposed would have a “devastating” impact on the U.S. economy.
“We must consider legislative alternatives that will not stifle economic growth and job creation,” Bachus, who is the committee chairman, said in a statement.
Bachus is looking for input on the rule from “investors, industry professionals and the public.” But it’s not like the banks haven’t had their views on the Volcker Rule heard up to this point.
In fact, CEOs of Wall Street’s major banks, led by JP Morgan Chase CEO Jamie Dimon, participated in “a closed-door meeting to personally lobby the Federal Reserve about softening proposed reforms that might crimp their profits.” Bloomberg News described the banks’ campaign against the Volcker Rule as a “lobbying blitz.” Shortly thereafter, JP Morgan Chase lost billions of dollars in a trading debacle.
Last month, a top Federal Reserve official called for a stronger Volcker Rule, saying, “I feel it is very important that the guard rails be strong and be set very close to the road because of the potentially severe dangers of, and costs associated with, proprietary trading by institutions that have access to the federal safety net.” But Bachus would evidently prefer that the financial industry write its own rules of the road.