US Chamber of Commerce comments on Volcker - Specific predictions of extortion

[MrCoffee]

Goldman Sachs comments on Volcker

Citi's comments on Volcker

MetLife's comments on Volcker


The US Chamber of Commerce created something with the delightfully cheery name of the “Center for Capital Markets Competitiveness” who submitted their comment dated December 15, 2011.

http://www.federalreserve.gov/SECRS/2011/December/20111222/R-1432/R-1432_121511_88579_394719157243_1.pdf

The CFTC is also obliged to ensure that its rules do not impair the price discovery functions of the markets, and that they are consistent with considerations of sound risk management practices and other public interest considerations. Pg. 4

We really like the insanely high prices the market “discovers” for IPOs; don’t even think about taking those away.

For such a happy-go-lucky sounding bunch, the Center for Capital Markets Competitiveness is singing a dour tune:

While much of the focus of the Volcker Rule Proposal has been on financial institutions, there are significant costs to non-financial companies that have not been contemplated by the regulators. To illustrate these impacts, included as an appendix to this letter is a survey that uses 2010-2011 historic data, of select U.S. financing companies that provide sendees for non-financial businesses. It appears that the Volcker Rule will impose at least a five basis point increase in bid-ask spreads. In a confidential survey of five large U.S. borrowers, it estimates that under the Volcker Rule Proposal increase in the bid-ask spreads will be closer to 25-50 basis points increasing lending costs from between $742 million and $1,483 billion. In reviewing Volcker Rule impacts upon potential lending strategies for smaller less frequent borrowers, hypothetical scenarios suggest an increase in bid-ask spreads will be closer to 50 and 100 basis points leading to increased lending costs of between $106 million and $211 million. Pg. 7

This sounds totally legit and supported by actual research and numbers, not just the random guesses of five unnamed "large US borrowers". Even so, the fact that five "large US borrowers" are planning to be extorted upwards of $1 Billion by banks seems wrong, don’t it?

[ProSense]

1. Here's

Volcker's comment, posted here: http://www.democraticunderground.com/1002305581

[MrCoffee]

2. He's not interested in weakening the proprietary trading rules, the banks are

Hence my displaying their reasoning for the consideration of the DU membership.

[ProSense]

3. Yes

these are interesting to read, but they are what they are: bogus rationalizations about why regulations are bad and will have adverse effects. The old: If you regulate us, you're interfering with the free markets and you'll force us to do bad things.

[MrCoffee]

4. They are what the rulemakers listen to

Soundbites are lovely; these are the statements that shape policy.

[ProSense]

5. Well,

They are what the rulemakers listen to

Soundbites are lovely; these are the statements that shape policy.

...they shouldn't be allowed to get their way. Think: Bank of America, swipe fee regulations and the bogus attempt to implement debit card fees.

I'm still holding out hope that this gains momentum: http://election.democraticunderground.com/1002233756