Law360, Washington (February 11, 2014, 5:51 PM ET)
Federal Reserve Board Chair Janet Yellen(cilck here) on Tuesday refused to consider shelving implementation of the Dodd-Frank Act and Volcker Rule despite criticism from members of the House Financial Services Committee, saying the regulations are long-term fixes for the financial crisis.
Although several Republican lawmakers voiced concerns that the Dodd-Frank Act and the Volcker Rule will hurt the U.S. economy and have put banks at a competitive disadvantage compared to their overseas peers, Yellen maintained the regulations have already made the financial industry more resilient.
“I think the impact of the [Volcker] Rule is something we'll monitor over time as it goes into effect,” she said during Tuesday's hearing. “The [financial regulatory] agencies have worked hard jointly to write a balanced rule that will permit banking organizations to continue to engage in critical market making activities. We'll be very careful in how they supervise institutions.”
But Rep. Bill Huizenga, R-Mich., claimed the rule has already damaged banks' market making activities and worried that the Fed and other financial regulators won't recognize those issues until they can't be repaired.
