The new regime comes into effect Tuesday. Banks
have had 18 months to prepare, but uncertainties remain around
several aspects of the rule
Under the rule banks are no longer allowed to engage in
proprietary trading, except for hedging, market making, trading
of government securities, operating insurance company
activities, and acting as agents, brokers or custodians. With
these exceptions, many supporters of the rule argue banks can
still get away with too much risky activity.
Most financial institutions subject to the rule
have dedicated significant time and effort into their programs
and shifting business lines. Many though, are concerned about a
lack of clarity in some areas of the regulation. Though they
have tried to comply, it will be hard to determine whether they
are compliant until after the first review.
"We are going to be seeing over the examination cycle the
tightening of the screws,"...