On February 4, 2010, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing entitled “Implications of the ‘Volcker Rule’ for Financial Stability.” The hearing followed on the heels of the February 2, 2010 hearing in which Former Federal Reserve Chairman Paul Volcker testified on behalf of the his eponymous rule, which President Barack Obama proposed on January 21, 2010 as a means of curbing commercial banks’ proprietary trading if they also benefit from federal protection of consumer deposits and have access to the Federal Reserve’s discount window. The proposal would also prevent those institutions from owning, sponsoring or investing in hedge or private equity funds. For more on the February 2, 2010 hearing, see “Senate Banking Committee Holds Hearing on ‘Volcker Rule’ Designed to Limit Banks’ Ability to Own, Invest In or Sponsor Hedge or Private Equity Funds
,” Hedge Fund Law Report, Vol. 3, No. 5 (Feb. 4, 2010). At the February 4, 2010 hearing, witnesses included Gerald Corrigan, a Managing Director at Goldman Sachs; Professor Simon Johnson, Ronald A. Kurtz Professor of Entrepreneurship, Sloan School of Management, Massachusetts Institute of Technology; John Reed, former Chairman and Chief Executive at Citigroup; Professor Hal Scott, Nomura Professor of International Financial Systems, Harvard Law School; and Barry Zubrow, Chief Risk Officer and Executive Vice President at JPMorgan Chase. Panelists at the hearing expressed concern regarding the feasibility of enforcing the Volcker Rule as well as its potential impact. This article details the testimony of lawmakers and panelists at the February 4, 2010 hearing.