Is the Volcker Rule a necessary safeguard or an unnecessary
burden? This is an important question that has underpinned many
discussions in the financial services sector in recent months,
especially as the US regulatory rollback gathers steam.
US Federal Reserve vice chairman for supervision Randal
Quarles has publicly stated the Rule needs to be clarified and
made to be more transparent vis-à-vis what exactly is
subject to it, and what in turn is not.
The Rule was introduced as part of the Dodd-Frank Act in
2010 to prevent systemic risk in the economy. It bans banks
from carrying out speculative trading activities including
investment banking and proprietary trading, and applies
to all banks regardless of size, assets held or even market
Unsurprisingly, it has been at the centre of much debate
since it was originally enacted, with recent calls to reduce
its scope of application including for smaller, non-systemic
banks. The House passed a bill to this effect on April 25,
which would leave around 10 US banks under the
Rule’s remit if approved.
William Galvin, chief securities regulator for the
Commonwealth of Massachusetts, has warned that weakening the
Rule could lead the sector on a dangerous path reminiscent of
the 2008 financial crisis. "These changes may increase
profitability for some firms and banks in the short term, but
they will increase risks for the economy and for investors,
savers, and taxpayers," he told IFLR.
With this mind, IFLR and Morrison & Foerster have are
running a quick poll to find out views on the future of the
Click http://bit.ly/VolckerRulesurvey to take
the confidential survey or contact firstname.lastname@example.org
if you would rather give your responses using a different