Volcker Rule Hits Senate Roadblock

Feb 2 2010 | 1:31pm ET

President Barack Obama’s plan to bar banks from the alternative investments industry may be dead on arrival on Capitol Hill.

Sen. Christopher Dodd (D-Conn.), the chairman of the Senate Banking Committee, is likely to quietly drop or water-down the so-called Volcker rule, which would ban bank holding companies from proprietary trading and bar them from owning, sponsoring or investing in hedge funds and private equity funds. Several Republican senators, including the Banking Committee’s ranking member, have attacked the proposals, named for former Federal Reserve Chairman Paul Volcker, and warned that they would threaten the growing bipartisan accord on an overall financial regulation overhaul.

“Chris is retiring so he wants to end his career with an important regulatory reform bill and he wants to make the bill bipartisan,” a Dodd staffer told dealReporter. “He is not going to risk bipartisan support to make the White House happy.”

But a spokesman for the senator told The New York Times that Dodd still supports the Volcker rule and denied the dealReport report.

Still, the future of the Volcker rule is anything but certain. The recent loss of a Massachusetts Senate seat to the Republicans has deprived Democrats’ of their filibuster-proof majority; even had they retained the seat formerly held by Sen. Ted Kennedy, several Democrats on both sides of the Capitol have expressed reservations about the Volcker proposals.

And that is to say nothing of Republican opposition. Sen. Richard Shelby (R-Ala.), the top Republican on the banking committee, is on record opposing the restrictions. Another committee member, Sen. Bob Corker (R-Tenn.), told the Times that the proposal is “a soak-the-rich populist grab.”

Dodd’s committee is to meet with Volcker on Tuesday.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.