Vague Volcker causes confusion

From its treatment of portfolio hedges to correlation tests and inventory limits, the Volcker rule lacks detail on key elements, lawyers say. That is an attempt to give the industry – and supervisors – some flexibility, but it could make compliance a game of chance. Peter Madigan reports

risk0114-volcker-confusion

Banks will not be allowed to engage in portfolio hedging under the terms of the Volcker rule, agreed on December 10 by five US regulators – but they will be allowed to hedge risks on a portfolio basis. That awkward distinction makes the final rule tougher than the version proposed in October 2011, regulators have claimed, but lawyers are dismayed at the lack of detail added to the statute after three years of work and 18,000 comment letters – the final rule adds just four words on the topic

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here