Senators Call on Regulators to Implement Strong Merkley-Levin Provisions

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Senators Call on Regulators to Implement Strong Merkley-Levin Provisions

Comments Instruct FSOC to Follow Congressional Mandate Restricting Proprietary Trading and Conflicts of Interest

October 28, 2010

Washington, D.C. – To ensure that the Merkley-Levin proprietary trading restrictions of the Dodd-Frank Act are implemented as intended by Congress, Senators Jeff Merkley (D-Ore.), Carl Levin (D-Mich.), and 16 of their colleagues submitted comments to the Financial Stability Oversight Council (FSOC) Thursday.

In the comments, the group of senators provided detailed guidance to regulators to help them effectively implement and enforce the statutory language. Senators Richard Durbin (D-Ill.), Tom Harkin (D-Iowa), John Kerry (D-Mass.), Dianne Feinstein (D-Calif.)., Bill Nelson (D-Fla.), Sherrod Brown (D-Ohio), Claire McCaskill (D-Mo.), Jim Webb (D-Va.), Robert Casey (D-Pa.), Sheldon Whitehouse (D-R.I.), Bernie Sanders (I-Vt.), Mark Udall (D-Colo.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.), Mark Begich (D-Alaska), and Ted Kaufman (D-Del.), who had all cosponsored the provision during the Senate floor debate on financial reform, joined Senators Merkley and Levin in providing the guidance to regulators

“After taxpayers were forced to bail out banks and other systemically significant financial companies whose proprietary trades went awry, we determined that the economy and taxpayers need strong protections against an increasingly casino-like financial system,” the senators wrote. “High-risk investing is an appropriate and legitimate activity in a free market system, but it cannot again imperil our nation’s economic well-being.”

The Financial Stability Oversight Council is a collaborative body established as part of the Dodd-Frank Act to monitor and address risks to financial stability. The FSOC is chaired by the Secretary of the Treasury and authorized to facilitate regulatory coordination, recommend stricter standards, and break up firms that pose a “grave threat” to financial stability, among other responsibilities. The FSOC is currently requesting comments to inform a study of the implementation of the Merkley-Levin provisions, to be completed by January 2011 as required by the Dodd-Frank Act. The comment period closes on November 5, 2010.

“Despite having just emerged as a nation from the worst financial crisis since the Great Depression, powerful interests will seek to weaken the Merkley-Levin Volcker Rule protections,” the senators wrote. “We in Congress resisted those efforts and provided you with a clear mandate and broad authority to act. The American people are now relying upon you to fully carry out the law.”

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