Wall Street banks will have two years to implement the so-called Volcker rule so long as they make a “good faith” effort to comply with the ban on proprietary trading, U.S. regulators said.
Banks will have the “full two-year period” provided by the Dodd-Frank financial overhaul law to “fully conform” their activities and investments, the Federal Reserve and four other U.S. agencies said in a statement today. The Fed has the authority to extend the period of compliance beyond July 21, 2014, the regulators said.
“During the conformance period, banking entities should engage in good-faith planning efforts, appropriate for their activities and investments, to enable them to conform,” the regulators said.
The rule, named for its original champion, former Fed Chairman Paul Volcker, attempts to reduce the chances that banks will make risky investments with their own capital and put depositors’ money at risk.
Bank regulators have said for more than a month that they would probably miss the July 21, 2012 implementation deadline for the rule. Fed Governor Daniel Tarullo, during a March Senate hearing, indicated that guidance on the enforcement of the law and scope of the conformance period would be forthcoming.
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