Repeal Senseless and Job-Destroying Volcker Rule from Dodd-Frank

Repeal Senseless and Job-Destroying Volcker Rule from Dodd-Frank

January 18, 2011
Contact:
Christine Hall, 202-331-2258
Lee Doren, 202-331-2259

 

Washington, D.C., January 18, 2011 – Today, the Financial Stability Oversight Council is issuing recommendations for implementing the Volcker Rule of Dodd-Frank. John Berlau, Director of the Center for Investor and Entrepreneurs at CEI, makes the case for repeal. He says the rule is already showing signs of lasting economic damage and will add -- not lessen -- systemic risk. Berlau will be reviewing the recommendations today and will have further comment as they are issued.

 
Statement by John Berlau, Director, CEI Center for Investors and Entrepreneurs
 

On Tuesday, the Financial Stability Oversight Council may issue its recommendations for implementing the Volcker Rule, the provision of the Dodd-Frank financial legislation that bans so-called proprietary trading by banks.

Initial reports indicate that the council may try to assuage some concerns about the rule’s economic effects by attempting to draw a line between long-term investing from short-term trading. Congress, however, should still repeal this senseless rule that is already showing signs of doing lasting damage to the economy and which will most likely add, not lessen, systemic risk.

The Volcker rule is based on the faulty premise that a financial institution making a loan — any loan — is somehow inherently more dangerous than investing or trading. It was that premise that led to the enactment of Glass-Steagall in the Depression that separated “commercial” from investment banking.