US lawmakers divided over Volcker rule’s impact on bond liquidity

Both sides cite Fed data to support their interpretations of prop trading ban

New analysis: Fed data showed banks under the prop trading ban had not pulled back from credit markets in two periods of market stress

House Republicans and Democrats have clashed over the impact of the Volcker rule on US credit markets, with both parties citing Federal Reserve data to support their almost diametrically opposed arguments.

At a hearing of the House Committee on Financial Services Capital Markets Subcommittee on March 29, Republican members said the ban had significantly impaired liquidity in US credit markets. Jeb Hensarling, the Republican chairman of the House Financial Services Committee, had earlier gone as

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