The Volcker Rule could hinder banks' ability to finance American businesses, ABA EVP Wayne Abernathy said yesterday on the PBS NewsHour program. Business customers, especially high-growth firms, rely on a variety of financial instruments. "Customers -- like somebody who has a new business they want to take to the next level -- they don't want to borrow money," Abernathy said. "They want to float a bond. They want to float a security. They need a bank to help them do that to take them to the next level."
This sort of financing has a complex interplay with proprietary trading, he added, meaning that any imprecision or confusion in the Volcker Rule would cause bankers to err on the side of caution, particularly where regulators may have different points of view.
At banks of all sizes, "there's a real desire to be able to focus their resources, focus their energies on funding job creation, funding development of the economy, meeting the needs of their customers from families to small businesses to midsize to large businesses," Abernathy said. "And in their efforts to [comply with Volcker], a lot of small and medium-size businesses are going to find it harder to get services."
Read an interview transcript.