Former Federal Reserve Chairman and current Obama financial reform cheerleader Paul Volcker appeared before the Senate Banking Committee to pump up his eponymous "Volcker Rule," which aims to limit the scope of banking activities. Watching yesterday's testimony, I'm left with a sinking feeling that we're watching a slow death of regulatory reform.
Critics contend that the Volcker Rule doesn't address two big issues: the extent and interconnectedness of global trading operations and inadequate capital requirements for too-big-to-fail financial institutions. But at least by giving Volcker a voice, there was some sense that the president was finally entering the debate.
But with friends like Chris Dodd, President Obama might as well give up on the Volcker Rule. Yesterday, the CT Senator managed to fall even further on my list of bad guys of the crisis. After throwing in the towel on his political career, Dodd can say whatever he wants, even if it disses his president. Dodd accused the administration of "getting precariously close" to excessive ambition for regulatory reform.
Sounds like Dodd is kissing up to the likes of Lloyd Blankfein and Jamie Dimon, then to his principles, if any still exist. After all, the soon-to-be ex-Senator will need a job next year and I hear that they're still passing out decent bonuses on Wall Street.
It's pretty depressing to watch the death of regulatory reform in slow motion. The process is likely to get mired in business as usual DC politics, not to mention the ability of Wall Street firms to find loopholes in the proposed measures.
Image by Flickr User David Berkowitz, CC 2.0