Top U.S. Regulators Confident on Volcker Reform

On Tuesday, two top U.S. financial regulators told the Reuters Summit that they were confident they would be able to reach an agreement to reduce significantly the burden of the Volcker rule, Reuters reported on October 3rd.

The remarks by Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo and Federal Reserve Board (FRB) Governor Jerome Powell offered the strongest indication yet that regulators are committed to tweaking the rule, which was crafted in the aftermath of the global financial crisis.

One sticking point in revamping the Volcker rule has been that it can only be rewritten jointly by five U.S. regulatory agencies – including the FRB and the CFTC.

However, Governor Jerome Powell told the Reuters Summit, "I am confident of what the outcome is going to be. I think we are going to be able to get to a five-agency rule on Volcker that is significantly less burdensome."

CFTC Chairman Giancarlo said he was also confident Volcker would be revised, adding that policymakers should avoid framing the debate over the future of U.S. financial reform as a "false choice" between keeping or reversing Dodd-Frank. "The only way forward is to take account of the way markets are changing and where we have regulations in place, make sure they're optimized," he said.

SFIG members submitted a response on September 21st to the Office of the Comptroller of the Currency's request for information regarding revisions to the Volcker Rule. SFIG's recommendations included, among others, redefining covered funds more narrowly as funds that rely solely on Section 3(c)(1) or Section 3(c)(7) of the 1940 Act and that principally engage in short-term speculative trading activity.

If you would like to join SFIG's Volcker Task Force, please contact

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