Volcker Rule Dead? Lawmakers Say Key Reform To Shrink Banks Is Unlikely To Pass Senate
"A proposal by former Federal Reserve Chairman Paul Volcker to limit bank's proprietary trading will be either be dropped or significantly modified in the Senate," according to Deal Reporter, citing lawmakers and staffers.
With the election of Republican Scott Brown to the Senate, the Democrats no longer have the necessary 60 votes to force through a Regulatory Reform package, and any bill will need at least some Republican support to pass. A Dodd staffer said the senator is likely to quietly drop or modify many of the recommendations in the Volcker rule to ensure Republican support for regulatory reform.
"Chris is retiring so he wants to end his career with an important regulatory reform bill and he wants to make the bill bipartisan," the staffer said. "He is not going to risk bipartisan support to make the White House happy."
A spokeswoman to Banking Committee Chairman Chris Dodd (D-Conn.), Kirstin Brost, pushed back on the report. It is simply false to assert, said Brost, that any decision has been made. "I don't know who Deal Reporter spoke to, but I speak for Chairman Dodd and Dodd is going to fight for the strongest bill he can get," she told HuffPost in a statement. "He is giving the Volcker proposal careful consideration. We are having two major hearings this week with Chairman Volcker and the Treasury Department to do just that."
UPDATE: Brost writes in to clarify: "Dodd strongly supports the Volcker rule."