President Obama has called on American financial regulators to speed up implementation of rules included in the Dodd-Frank Act.
According to the Financial Times, despite the legislation being effective from July 2010, some of the measures included in the Act have been intensely lobbied against by big banks and have yet to be introduced. One measure still to be put in place is the so called “Volker rule” which bans proprietary trading by financial institutions.
Yesterday, Obama met with Treasury secretary Jack Lew, Federal Reserve chairman Ben Bernanke and the heads of the Securities and Exchange Commission and Commodity Futures Trading Commission.
“The President commended the regulators for their work but stressed the need to expeditiously finish implementing the critical remaining portions of Wall Street Reform to ensure we are able to prevent the type of financial harm that led to the Great Recession from ever happening again,” the White House said after the meeting.
It is not the first time American regulators have been slow to get financial regulations in place. As Basel III is shaping the regulation on banks in the EU and around the world, the US along with Argentina and Russia have still not fully implemented Basel II.
The slow progress on getting Dodd-Frank up and running has led some in the US to press for more aggressive measures. In July, former Republican Presidential nominee John McCain and was among a cross-bench group of Senators to propose the reintroduction of the 1933 Glass-Steagall Act, which completely separated retail and investment banking but was largely repealed in 1999.
McCain said: “Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits. If enacted, the 21st Century Glass-Steagall Act would not end Too-Big-to-Fail. But, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system, and reduce risk for the American taxpayer.”