With the Volcker Rule, a complex plan to rein in Wall Street risk taking, the waiting is the hardest part.
A year after first proposing the rule, regulators are still fine-tuning a final version. And the Congressional supporters of the crackdown, which would limit big banks from trading with their own money, are growing antsy.
“We urge you to move quickly, make the final adjustments needed to simplify and strengthen the October 2011 proposal, and bring the process to a conclusion,†Senator Carl Levin, Democrat of Michigan, and Senator Jeff Merkley, Democrat of Oregon, said in a letter to regulators on Thursday.
The lawmakers pushed the rule through Congress in 2010, arguing that banks should not make risky wagers while enjoying government deposit insurance and other federal support. The rule is named for Paul A. Volcker, a former chairman of the Federal Reserve who campaigned for the ban on proprietary trading.
The letter on Wednesday is the lat est Congressional attempt to light a fire under the five regulatory agencies writing the rule, including the Federal Reserve and the Securities and Exchange Commission. In April, 22 senators called for regulators to adopt a final rule by the summer. Representative Barney Frank, the Massachusetts Democrat who co-authored the Dodd-Frank financial regulatory overhaul that created the Volcker rule, once called on regulators to issue a final rule by Labor Day.
Regulators aimed to wrap up in September, but they encountered delays in the wake of JPMorgan Chase‘s $6 billion trading loss, which became a flash point in the debate over the rule. Regulators, which are still split on certain details of the rule, now hope to finalize the plan by the end of the year.
That's too slow for Mr. Levin and Mr. Merkley. Some regulators, they argued, should publish the final rule even if all the agencies are not yet on board.
“While American families and businesses should be enjoying the protection of the Volcker rule, your agencies' ongoing failure to implement these important protections has left them and our economy at greater risk of another financial crisis,†they wrote.
