Banks have until July 21, 2014, to comply with the Volcker Rule, the U.S. Federal Reserve Board confirmed today.
The Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, is a piece of Dodd-Frank that restricts the proprietary trading activities of investment banks.
The Federal Reserve is still working on the final rules of the regulation along with the Federal Deposit Insurance Corp. (FDIC), the Comptroller of the Currency, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The agencies have not yet adopted the final verbiage of the rule.
The Volcker Rule has been criticized by some institutions who call it an overreach by legislators and regulators.
In the face of such extreme restrictions on their daily business, many non-U.S. banks will have no choice but to simply transfer many of their operations to other countries due to the unwarranted application of the rule, which wont benefit anyone, Douglas Landy, head of the U.S. Financial Services Regulatory Practice at international law firm Allen & Overy and a former staff attorney at the New York Federal Reserve, said earlier this year.
(CG)