Talk Radio News Service: News, Politics, Media

By Benny Martinez - University of New Mexico / Talk Radio News Service

Senators Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.) announced Monday that they have created an amendment that will replace the Volcker Rule, a provision proposed by former Federal Reserve Chairman Paul Volcker aimed at requiring banks to limit their riskier financial activities, in the Wall Street reform bill.

According to Merkley, the Volcker rule served as a place holder that asked regulators to conduct studies in search of problems in the financial market and would then provide Congress with suggestions on how to fix them, but the Senators’ new amendment would effectively eliminate high-risk proprietary trading, an element included in the language of the Volcker Rule and that lay at the heart of the financial meltdown.

“We are declaring as a Congress that high-risk proprietary trading is inappropriate to have in the same house as a bank holding company and then having the normal partnership with regulators to implement that direction, that direction being carve this off and remove it separately,” Merkley said.

The Democratic duo said that this bill has as many as 17 co-sponsors and is supported by Chairman of the Senate Banking Committee Chris Dodd (D-Conn.) and by the Department of Treasury. Despite the fact that the amendment does not have a single Republican co-sponsor, both Senators are riding the support of Chairman Dodd and said there will be a vote on the Senate floor soon.

“We clearly do expect that that will be the case based on the support of Senator Dodd,” Levin said. “We are confident that this will be voted on and we’re confident that it will have not just Senator Dodd’s support, but with that support, have an extremely good chance of passing.”