The impact on transaction costs resulting from the Volcker rule is unclear. While the Volcker rule could make financial transactions more affordable to individuals by making banks more like utilities, some experts believe it could drive costs up and reduce liquidity in the system.
Tom Quaadman, vice president of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, says it makes U.S. firms less competitive with their European and Asian counterparts who aren't subject to the rule. If investors, including Americans, move their money to overseas banks, there will be less liquidity here.
"It places American financial service firms at a disadvantage," Quaadman says.