Volcker Said to Lobby SEC Chairman Personally on Volcker Rule
Former Federal Reserve chairman Paul Volcker met in person with U.S. Securities and Exchange Commission Chairman Mary Schapiro this week to discuss the proposed ban on proprietary trading named for him, according to a person familiar with the meeting.
Volcker, 84, has been a prominent advocate for the ban, which he asserts would curb the kind of risky trading that contributed to the 2008 financial crisis.
“Proprietary trading of financial instruments -- essentially speculative in nature -- engaged in primarily for the benefit of limited groups of highly paid employees and of stockholders does not justify the taxpayer subsidy implicit in routine access to Federal Reserve credit, deposit insurance or emergency support,” Volcker wrote in a commentary submitted to regulators Feb. 13.
Volcker met with Schapiro in her office to discuss the proposed rule on Feb. 15, said the person, who declined to be identified because the meeting hasn’t yet been made public. The two also discussed Volcker’s views on money-market funds and international accounting standards, the person said.
Volcker didn’t immediately respond to a telephone call requesting comment.
The ban on proprietary trading, proposed by Volcker when he served as an economic adviser to President Barack Obama, was among the most prominent provisions in the 2010 Dodd-Frank Act’s overhaul of Wall Street rules.
The rule, which was issued in draft form in October, is scheduled to take effect in July. A public comment period on the proposal closed Feb. 13.
In addition to the SEC, the rule must also be approved by the Federal Reserve, Federal Deposit Insurance Corp., Commodity Futures Trading Commission and Office of the Comptroller of the Currency.