The first, and intended, effect is apparent even to the incompetent analyst—this is what is seen; but the most important effects are not seen, unless we make an effort to foresee them. Now that the rule has been in effect for some time, it is critical that the Commission and other agencies have the opportunity to receive frank input from the public.
The release solicits this input through requests for Volcker rule essay that span a wide range of issues raised by the proposed amendments, including through questions about the burden of our current and proposed reporting requirements and the usefulness of the various metrics.
Instead, we must strive to make it less harmful. It attempts to distinguish prohibited proprietary trading from permitted market-making and hedging activity, but because the differences Volcker rule essay these activities are exceedingly fine, the regulatory framework is exceedingly complex.
Moreover, many of these additional requirements lack adequate justification: At the same time, however, the proposal significantly modifies the metrics-reporting requirements for banking entities involved in underwriting and market making, and in some cases seems to require these firms to report additional metrics that may represent a significant increase in the reporting burdens for such firms.
Although it does not fully resolve any of my fundamental concerns about the Volcker Rule, it does in many ways seek to ameliorate the negative effects of the rule. In addition to directly deterring critically important economic activities, the substantive complexity of the Volcker Rule imposes significant compliance costs on bank-affiliated broker-dealers and investment advisers, forcing them to divert resources away from more productive activities.
In the bullish market that has prevailed since the Commission, the CFTC, and the federal banking regulators finalized our regulations implementing the Volcker Rule, the costs of this over-deterrence may be difficult to identify. Seymour Cain, Library of Economics and Liberty I worry that it is precisely during a period of significant market stress that we may fully come to appreciate the downsides of increasing the legal risk for companies engaging in these activities.
I appreciate your responsiveness to my many questions about the proposal, and particularly to my questions in connection with the metrics-reporting requirements. The immense administrative complexities involved in complying with the rule discourage banking entities from engaging in market-making and hedging activity as these entities naturally shy away from activities that are permitted under the law but that may be difficult to distinguish from prohibited activity to a skeptical regulator scrutinizing the activity in hindsight.
The release often fails to explain why the data is necessary as opposed to merely convenient and potentially interesting for the regulatorhow the data will be used, and whether the benefits of having the data available to the regulator warrant the expense of requiring the data to be reported.
The proposed substantive amendments reflect a serious attempt to grapple with some of the challenges that the Volcker Rule presents to banking entities. In closing, I would like to express my heartfelt thanks to the staff in the Divisions of Trading and Markets and Investment Management, along with the Office of General Counsel and DERA, for their hard work on this release over a short, but very intense, timeframe.
Peirce June 5, My views on the Volcker Rule are no secret.
I would particularly encourage bank-affiliated broker-dealers engaged in market-making and underwriting activity to provide the Commission and our fellow regulatory agencies with a detailed assessment of the costs imposed by our current reporting regime, as well as the likely costs that would arise under the proposed amendments to the metrics-reporting requirements.
These are important improvements to the Volcker Rule that I am pleased to support.The Rule of Law Essay examples - The rule of law is a difficult concept to grasp and proves elusive to substantive definition.
However, the following work considers the attempts of various social and legal theorists to define the concept and pertinent authorities are considered. These governments argue that the rule would make it hard for them to access loans for their public operations and projects (Goldfarb and Schneiderpar.
Volcker Rule Restrictions on Proprietary Trading: The Impact on USMediumCapitalization Banks Abstract The paper aims tofind out the effect of the announcement of the Volcker rule on the stock returns of commercial banks with medium capitalization, defined asmillion to 5 billion.
Pros and cons of Glass-Steagall & Volcker Rule Who benefits? Who loses? Bank Interconnectivity: How has it affected the way banks do business? Public Well-being: How has it affected investors? Related posts:Event managementworld reflectionFinance and Accounting Currency crises and currency war.
proprietary trading by commercial banking organizations – the so-called “Volcker Rule”. In sorting out the problems – the real from the imaginary, the truly important from the incidental – the basic logic and approach of the law deserves re-emphasis.
Volcker Rule Restrictions on Proprietary Trading: The Impact on USMediumCapitalization Banks Abstract The paper aims tofind out the effect of the announcement of the Volcker rule on the stock returns of commercial banks with medium capitalization, defined asmillion to 5 billion.Download