“Consumer groups and supporters of the rule have leaned on regulators to stick to the implementation timeline and pushed back against assertions that the rule will damage capital markets. The arguments from financial firms ‘are all founded on the irrational assumption that, once bank proprietary trading ceases under the Volcker Rule, others will not expand to meet demand,’ Wallace C. Turbeville, a former Goldman Sachs banker, said in testimony prepared for the hearing on behalf of Americans for Financial Reform, an umbrella organization made up of consumer groups, labor unions and civil rights law firms.”

“However, a representative of the group Americans for Financial Reform argued the Volcker Rule is a vital safeguard for the financial system, ensuring that American taxpayers no longer effectively guarantee risky trading done by insured depository institutions.”

“Lawmakers are considering new policies aimed at preventing a repeat of the MF Global debacle…the committee’s chairwoman, Senator Debbie Stabenow, sent roughly 20 letters on Wednesday to some of the industry’s biggest players, seeking suggestions for new policies. … She sent letters to consumer advocacy groups, including Americans for Financial Reform…”

Click here to view this week’s highlights and lowlights in Wall Street Reform – January 14, 2012 – January 20, 2012.

The Volcker Rule and Market Liquidity
The Volcker Rule will restrict banks’ ability to speculate in financial markets. Recently, critics of the rule have claimed that it will lead to declines in market liquidity that will …

Read Wallace Turbeville’s testimony at the House Financial Services hearing on “Examining the Impact of the Volcker Rule on Markets, Businesses, Investors and Job Creation” here.