Monday, June 24, 2013

Fed Chair Says Volcker Rule Will be Finalized by Year-End

At a press conference following the recent  Federal Open Market Committee, Federal Reserve Board Chair Ben Bernanke said that regulators have made a good bit of progress on finalizing the Dodd-Frank Act Volcker Rule and he anticipates that being done this year. Conceding that it has taken time to do these regulations, he said that there are a number of reasons for that, including that they are inherently quite complicated. The Volcker Rule, for example, involves some very subtle distinctions between hedging and market making and proprietary trading. Another reason is that the Volcker Rule involves multiple agencies which have to coordinate, cooperate and agree on language. The SEC, CFTC, OCC, FDIC and the Fed are all coordinating on the Volcker Rule.

Chairman Bernanke also emphasized that federal regulators have to get the Volcker Rule right; and that means having extended comment periods, getting lots of information from the public and then reviewing those comments and doing all that can be done to ensure that the regulators are responsive to the many concerns and suggestions. The Volcker Rule is codified as Section 619 of the Dodd-Frank Act.