Corker Challenges “Volcker Rule”

Tennessee Senator Bob Corker questions the reasoning behind stricter banking rules proposed by the Obama administration.

The changes would prohibit large commercial banks from something called “proprietary trading-“ high risk investments that don’t benefit the banks’ customers.

Former Federal Reserve Chairman Paul Volcker crafted the proposed rule. Testifying before the Senate Banking Committee, Volcker said it would serve as insurance against another economic collapse like the one that happened in 2008.

Corker challenged Volcker on that assertion, saying the speculative trading that the rule would prohibit had nothing to do with the recent banking crisis.

“Not a single organization that was a bank holding company or financial holding company that had a commercial bank had any material problems at all with proprietary trading.”

In response, both Volcker and Deputy Treasury Secretary Neal Wolin said the practice probably did play some role in the 2008 collapse, but neither pointed to any specific examples.