Saturday, September 22, 2012

Should Other Countries Take the Volcker Rule Plunge First?

Rep. Peter King (R-NY), a member of the House Financial Services Committee, will soon introduce a bill to suspend enforcement of the Volker Rule until the Treasury Department can certify that other countries have adopted and are abiding by similar statutory restrictions on on proprietary trading and sponsoring hedge funds by financial institutions.  The U.S. Financial Services Global Viability Act specifically targets  the United Kingdom, France, Germany, Switzerland, Japan, Brazil, China, Canada, and Mexico as jurisdictions of concern.  The bill would require not just certification by the Treasury Department for these countries, but an opportunity for hearings and comment by interested parties. Under the legislation, these certifications could be challenged further in the United States Court of Appeals for the District of Columbia.  The proposed U.S. Financial Services Global Viability Act represents the latest effort by law makers and others to delay or repeal the Volker Rule amid concerns that the Volker restrictions would undermine U.S. competitiveness and damage market liquidity.