Financial Services Committee
Bachus Urges Chairman Frank To Convene Required Oversight Hearing to Examine the Effect of Volcker Rule on American Competitiveness
WASHINGTON, Jul 30 -
- Financial Services Committee Ranking Member Spencer Bachus sent the following letter to Chairman Barney Frank urging him to schedule the required annual hearing in which the Treasury Secretary testifies on the state of the international financial system, citing, among other reasons, the need to examine the effect of the so-called Volcker Rule on the competitiveness of American financial institutions. For the past three years, Committee Democrats have failed to schedule this statutorily required oversight hearing.
Ranking Member Bachus said in the letter, "Secretary Geithner has now been in office for over a year and a half, and should be required to fulfill this Administration's statutory obligation without further delay, particularly in light of the ongoing concerns about the stability of the global financial system and the sovereign debt crisis being experienced by several major European countries."
"One of the international issues that the Committee should address with Secretary Geithner is the possible effect of the so-called Volcker rule on the competitiveness of American financial institutions....[During] the House-Senate Conference, I raised the point that the ‘universal banking model' that is at the heart of the European financial services industry made it highly unlikely that foreign banks would abide by the same requirements, and I offered an amendment that would have conditioned the U.S.'s adoption of the Volcker rule on the adoption of similar standards by a majority of the G-20. That amendment was voted down in return for vague assurances from Secretary Geithner that he would "continue to encourage our international partners to advance similar prudential objectives" to those reflected in the Volcker rule.
"However, within days of enactment of the Dodd-Frank Act, Federal Reserve Governor Daniel Tarullo testified before the Senate Banking Committee that the Volcker rule is not going to be adopted internationally, precisely because other countries follow a universal banking model. In light of this testimony by the Fed Governor primarily responsible for coordinating U.S. regulatory policies with our international counterparts, Secretary Geithner must be asked to explain what our government is doing to ensure that other countries abide by the same rules that U.S. banks will be forced to follow as a result of the Dodd-Frank Act," Bachus concluded.
For a copy of the letter to Chairman Frank, click here.