The Volcker Rule, named after former Federal Reserve Chair Paul Volcker, prohibits banks from conducting certain investment activities with their own accounts and limits their ownership of and relationship with hedge funds and private equity funds – or covered funds. It is designed to prevent banks from making the kind of speculative investments that led to the 2008 financial crisis.
The OCC is seeking comments on whether certain aspects of the rule should be revised to achieve its goals while decreasing the compliance burden on banks. Specifically, the OCC is seeking to input on clarifying key provisions that define prohibited and permissible activities, including covered funds. Also, it is looking for feedback on how regulatory agencies could implement the existing rule more effectively without revising the regulation.
“A bipartisan consensus has emerged that the Volcker Rule needs clarification and recalibration to eliminate burden on banks that do not engage in covered activities and do not present systemic risks,” Acting Comptroller of the Currency Keith Noreika said. “Regulators do not have a monopoly on good ideas. Public input will help inform our path forward with the views, concerns, and data of those affected by this rule and provides for a more inclusive and transparent process.”
Respondents can provide comments within 45 days of publication in the Federal Register.
Rob Nichols, president and CEO of the American Bankers Association, welcomed the opportunity to provide input.
“At the end of the day, we all seek an implementation program that is clear and promotes financial stability and economic growth,” Nichols said. “We appreciate that the OCC statement references several of ABA’s past comments regarding the Volcker Rule, and we intend to be active participants in the public reform discussion.”