It looks like financial institutions will have plenty of opportunity to influence the final form of the Volcker Rule. The leaked draft of the preamble has highlighted a large range of ambiguities and questions outstanding from US regulators.
The document, leaked on Wednesday, is expected to be voted on by the Federal Deposit Insurance Corporation (FDIC) next Tuesday.
But the 205-page document raises almost as many questions as it answers, containing plenty of inconsistencies. “Despite how long the document is, I’m not sure how far they’ve advanced beyond what the original statute says,” said Dwight Smith at Morrison & Foerster in Washington DC.
Once the proposal is approved and published in the federal register, institutions will be offered a 60-day comment period. It should be a busy two months, with scope for improvements to the draft.
Ambiguities: an infinite number more
There are certainly ambiguities. Proprietary trading, defined...