Rep. Maloney Asks Financial Regulators for Volcker Rule Data Update
August 30, 2016 / Source: Congresswoman Carolyn B. Maloney
Aug 29, 2016
Congresswoman Carolyn B. Maloney (NY-12), Ranking Member of the House Financial Services Subcommittee on Capital Markets and GSEs, today sent a letter to U.S. financial regulators asking for an update on the ongoing implementation of the Volcker Rule. In the letter to the Federal Reserve, Federal Deposit Insurance Corporation, Commodity Futures Trading Commission, Office of the Comptroller of the Currency, and the Securities and Exchange Commission, the Congresswoman requested “an update on the quantitative trading metrics that the agencies have been collecting” under the Volcker Rule.
The Volcker Rule requires banks with significant trading operations to report daily quantitative trading data for each trading desk, in order to help the agencies distinguish between prohibited proprietary trading and legitimate market-making and hedging activities. The agencies have been collecting these data since July 2014, and therefore now have roughly two years of quantitative trading data.
“I believe that these quantitative trading metrics can provide important information not only about the efficacy of the Volcker Rule, but also about the general trading activities of U.S. banks, and the degree to which these trading activities have changed over the past two years,” wrote Rep. Maloney. “For example, there has been a vigorous debate about the liquidity of certain U.S. fixed-income markets, such as corporate bonds, and about whether the liquidity of these markets has deteriorated in recent years. Data on the inventory turnover, inventory aging, and customer-facing trade ratios in the fixed-income market-making units of the large banks could prove particularly informative in this debate.”