|MARCY GORDON, AP Business Writer|
Republican lawmakers and a few Democrats questioned the merits of the so-called Volcker rule at a hearing Wednesday.
The rule was required under the financial overhaul that the
Regulators hope it will limit the kind of risky trading that hastened the financial crisis and forced taxpayers to bail out the banks.
Republicans and bank industry officials say the ban would send bank business overseas, which would cost jobs.
Democrats have also challenged the rule, saying it is too complex and marred with loopholes. A similar point has been made by
The regulators said they tried to balance the need to restrain risky trading with the goal of keeping financial markets vibrant.
One challenge is that it is hard to determine when a bank is trading for itself or its client. The regulators are proposing to use a test based on the intent or purpose behind trades.
"We're clearly open to a better idea if there is one out there," said Fed Gov.
The regulators also said they wouldn't punish banks if their traders unintentionally cross the line between the two kinds of trading.
About 120 House members of both parties have sent a letter to the regulators, who also include Securities and
The rule has been approved in draft form by the Fed, the
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