The separation of U.S. banks is delayed

The separation of U.S. banks is delayed

Volcker regulation limiting bank speculation the U.S. could be delayed . The U.S. Federal Reserve (Fed) think about it, in any case lead the Financial Times Monday, November 18 .
The law is named after a former president of the Central Bank, Paul Volcker, and must endorse the separation of proprietary trading (prop trading) other activities of banks, was supposed to come into force in July 2014. But this time may be shifted to July 2015.

The law to endorse separation of proprietary trading (prop trading ) in other bank activities could be shifted by one year to July 2015. | Stephen Amiaga / CC- BY- SA 2.0 .

Indeed, the enactment - separate application - continues to lag behind and is now announced for late 2014. The banks argue the difficulty of distinguishing proprietary trading and market making activities or hedging , they are indispensable, according to intervene in the financial markets .

Thus, the sums lost by JPMorgan in the case of so-called " London Whale " were part of a hedging activity , not proprietary trading , says the bank.




TENSIONS BETWEEN AGENCIES

The delay comes amid tensions between the agencies responsible for the implementation of the Volcker Act. " Some regulators have said it would be [ completed ] by the end of the year and we are absolutely determined to try to move forward as quickly as possible ," said Mary Jo White, the patroness of the U.S. stock gendarme, the Securities and Exchange Commission ( SEC) Tuesday, November 12 .

Included in the Dodd-Frank Wall Street regulation , passed in 2010 , this provision must, to come into force yet to be finalized by five U.S. regulators including the SEC, the Fed and the agency in charge of derivatives (CFTC ) .

"We are always trying to define the contours of the regulation ," said Ms White, adding that the final text would provide "exceptions" . The ruling assured that regulators were concerned that the text is translated by " unintended consequences " including a liquidity crunch in the banking system .

QUESTIONS ON THE WILL OF REFORMS

According to the law firm Davis Polk , November 1 , 162 398 provisions on account that the Dodd- Frank Act were completed , approximately 40%.

Delays in the implementation of the law have raised questions about the real intention of the Obama administration to limit the activities of the banking giants . In September , Mr. Volcker himself had deemed " incredible " that the rule is not yet in force, ensuring that there was , he said, " no reason " to justify such a delay.

End of August , despite the creation of a body bringing together key regulators in the United States ( FSOC ), the Financial Stability Board , which brings together central bankers and regulators from 24 countries , said the "complexity " and " fragmentation " of the American system .

Dodd- Frank: small steps
Among the provisions of the Dodd- Frank Act , many argued . Thus, the banking giants in the heart of the 2008 crisis , should develop a " testament" to their ordered in the event of bankruptcy and are now subject to annual resistance tests assessing their strength in case of dismantling financial shock .
Law " Dodd -Frank " is also supposed to have strengthened the detection risk giving birth to an agency to protect consumers of financial products.
The CFTC has proposed Tuesday to limit an investor transactions on commodity contracts to 25 % of supply that can be physically delivered at maturity of the contract. The new text is submitted for public consultation for 60 days before being adopted by the leaders of the CFTC.