The group of 22 senators issued a letter on Thursday to major U.S. regulators, including the Federal Reserve Board, Securities and Exchange Commission and the Federal Deposit Insurance Corp.
“We write as the original sponsors, co-sponsors and supporters of the effort to establish a strong wall between our nation’s core banking system and high-risk, potentially conflicted trading activities,” the letter said.
The letter also claims that the high-risk trading activities conducted before the passage of the Dodd-Frank Act, which established the Volcker Rule, were contributing factors to the financial crisis and should be restricted.
“To ensure that taxpayers are never again asked to bail out these bad bets, and that our economy never again suffer[s] the consequences of excessive risk-taking on Wall Street, Congress adopted the Markley-Levin provisions of the Dodd-Frank Act, which set forth the statutory basis for the Volcker Rule,” the letter said.
The senators maintain that, with the implementation of the Volcker Rule, the U.S. financial market will be in better shape.
“With fewer conflicts of interest and more reliable market-makers, our markets will be healthy and vibrant, just as they were when the Glass-Steagall Act protected our financial system,” the senators wrote in the letter. “But we need you to fulfill the statutory mandate.”
The senators also call on regulators to maintain the ease of compliance for financial firms that, by definition, do not engage in any of the restricted activities under the Volcker Rule. Additionally, the letter also insists in a finalized Volcker Rule before the end of the summer.
“The American people suffered greatly because of the financial crisis,” the letter said. “The Volcker Rule is a critical protection to help ensure that such a crisis does not happen again. The economy needs these protections, our constituents deserve these protections, and the law demands these protections. Please implement a clear, strong, and effective Volcker Rule without delay.”