Adjusting to the compliance management requirements of the Volcker Rule has likely been the topic of conversation at many meetings held by buy-side financial institutions ever since the regulation was announced. And in the nation’s capital, the rule served as the basis for some of the comments made by the acting deputy secretary for domestic finance at an annual conference.
On March 3, the annual Washington Conference of the Institute of International Bankers was held. One of the speakers at the event was Mary Miller, who serves within a prominent financial division at the Treasury Department.
Most of Miller’s comments were about what regulations were passed in 2013 in the financial services sector, making note of the Volcker Rule, in particular, and how it came to be.
“This past December, the five independent rulemaking agencies finalized the Volcker Rule,” said Miller, referencing the Federal Deposit Insurance Corporation, Securities and Exchange Commission and Federal Reserve, among others. “[Treasury] Secretary Lew, in his capacity as chairperson of the Financial Stability Oversight Council, was responsible for coordinating the writing of the rule.”
Regulation was initially more far-reaching
She added that what many financial executives may not realize is that the Volcker Rule could have actually been four separate rules, because the elements of it are so comprehensive. However, because this would likely make the market less workable for buy-side financial institutions, regulators were able to narrow its scope.
“Finalizing a single rule was a priority for Secretary Lew, and I assure you it was no small feat,” said Miller.
She stated further that while the Volcker Rule isn’t perfect, its tenets ultimately live up to what President Barack Obama desired – keeping financial markets free-flowing while at the same time avoiding the potential of another economic collapse due to ill-advised speculative trading. With CEOs now having to establish how they’re complying with the law, this will further implement the appropriate controls on the economic sector, without adversely affecting liquidity.
Despite the government’s statements that the Volcker Rule will not be deleterious to financial markets, organizations like the U.S. Chamber of Commerce have given indications that the regulation has the potential to create a lot of problems as businesses attempt to grow. David Hirschmann, president and CEO of the Chamber’s Center for Capital Markets Competitiveness, recently said that the Volcker Rule has the potential to make U.S. businesses less competitive on the world stage, not to mention domestically.