Volcker 2.0 Rewrite: Significant Big-Bank/FBO Relief, Considerable Political Controversy
As anticipated, the FDIC today approved what is ultimately expected to be an interagency final rule revising the Volcker Rule that has come to be known as Volcker 2.0 because it is such a significant rewrite of the initial, 2013 standard (see Client Report PROPTRADE18). Reflecting the controversial nature of the changes, the final rule was approved by the FDIC on a 3-1 vote, with Director Gruenberg dissenting. Mr. Gruenberg’s concerns reflect those already voiced by Senate Banking Ranking Member Brown (D-OH) and HFSC Chairwoman Waters (D-CA), with Ranking Member McHenry (R-NC) making it clear that Republicans will largely support the revision through what is sure to be a contentious process at the FRB, SEC, and CFTC. The rule could also figure on the campaign trail if Sen. Warren (D-MA) or Sen. Sanders (I-VT) uses it to argue that big banks are winning undue advantage from the Trump Administration, reviving proposals for a new Glass-Steagall Act (see FSM FHC21) or other big-bank restructuring proposals.