The Federal Reserve is giving banks an additional two years to comply with Volcker Rule standards for treatment of collateralized loan obligations after industry complaints that the requirements would lead to big losses.
U.S. regulators should go back to the drawing board to fix rather than postpone banks’ concerns over treatment of collateralized loan obligations under the Volcker Rule, Representative Scott Garrett said today.
The Volcker Rule will cost U.S. national banks as much as $4.3 billion to implement as it forces them to sell restricted investments at a loss, according to a study by the Office of the Comptroller of the Currency.
The biggest U.S. banks are about to learn whether they can pay out more than $75 billion in excess capital to investors as the Federal Reserve completes stress tests of their ability to survive new economic calamities.
U.S. regulators implementing Volcker Rule curbs on banks’ trading have formed an interagency group to coordinate their efforts and reduce chances for companies to play for advantage by exploiting differences.
Paul Volcker said he wasn’t involved with writing the final version of the rule that bears his name, staying abreast of developments from a distance as regulators crafted details of his curbs on trading by banks.