Big Banks Push for Early Guidance on Volcker Rule

By Donna Borak

As a regulatory deadline rapidly approaches, big banks are becoming increasingly anxious about how they should comply with a ban on proprietary trading. Although regulators have issued a proposal on the so-called Volcker Rule, the plan has been widely assailed as too complicated and regulators are unlikely to make a July 21 deadline to release a final rule. But the ban would take effect whether the final rule is completed or not — leaving banks afraid they will be left in the dark on how to comply with the statute without concrete guidance from regulators. “The key question that the banks are most critically dependent on — what do we have to do while we’re waiting for final standards?” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics. Regulators insist there are fail-safe ways to provide guidance to the industry in the event they miss the deadline, while also noting that there is a two-year period for institutions to adhere with the new rule.”