The controversial legislation related to the Dodd-Frank Act
was released Tuesday by federal regulators for comment. If
enacted, analysts believe the rule would severly weaken
revenues at U.S. investment banks.
TheVolcker Rule, released yesterday by the Federal Reserve,
the Federal Deposit Insurance Corp. and the Office of the
Comptroller of the Currency was name after former Fed
chairman Paul Volcker.
The rule seeks to prohibit banks' involvement in hedge
funds and private equity firms (investment of up to 3%)
was well as placing limitations on firms' own trading
(proprietary trading) practices.
Proprietary trading limitation could be detrimental to
some banks, which see a portion of their revenues from
trading their own accounts. There are numerous exceptions
to the rule,which include profiting from securities, which
thebanks are market makers, and other subtle distincitons.
Nonetheless, banks are expected to see greater costs to
implement such measures, including hirign additional
compliance personel to oversee and monitor such actitives.
The rule is now oen for the public to comment upon until
January 12,3012.
Sheila McKinney
