Jan. 24 (Bloomberg) -- U.S. financial companies lobbying to change the Volcker rule ban on proprietary trading will have to wait until 2013 because the upcoming elections will make this a “non-year in Congress,” Senator Bob Corker said today.
Political pressure will make it nearly impossible to generate support from Senate Democrats or President Barack Obama’s administration to advance any proposals for changing the Dodd-Frank Act measure, Corker said at a U.S. Chamber of Commerce conference on the Volcker rule in Washington.
“We need to revisit our approach here, and I’m hopeful in the months and years ahead we will do so,” said Corker, a Tennessee Republican who serves on the Senate Banking Committee.
The Federal Reserve and other agencies have faced criticism over a 298-page Volcker rule proposal that has been faulted by lawmakers, banks and international regulatorsas too complex and potentially damaging for financial markets. Regulators are seeking public comment on the proposal.
The rule named for former Fed Chairman Paul Volcker, who championed it as an adviser to Obama, would ban banks from proprietary trading while allowing them to continue short-term trades for hedging or market-making. It also would limit banks’ investments in private-equity and hedge funds.
Dodd-Frank, the regulatory overhaul enacted in 2010 requires that the rule be in place by July 21.
Corker, who expressed “serious doubts” the rule will prove effective, said he will be trying to move changes on a “surgical basis” after the elections, which could change the balance of power where Democrats control the White House and the Senate while Republicans hold the House of Representatives.
Any proposed changes would run up against Senators Jeff Merkley of Oregon and Carl Levin of Michigan, the two Democrats who drafted the rule and have argued for strengthening the proposal aimed at protecting customer deposits.
--Editor: Gregory Mott
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