US banks off the hook until 2022

[brentspeak]

And so the next time you hear someone exalt that this bill "contains the Volcker rule!"...

http://www.guardian.co.uk/business/2010/jun/29/us-banks-off-the-hook-until-2022

US banks off the hook until 2022

guardian.co.uk, Tuesday 29 June 2010 18.49 BST

It was billed by Barack Obama as the toughest crackdown on Wall Street since the great depression. But top US banks could be given until 2022 to comply with the so-called Volcker rule, which is supposed to restrict financial institutions' risker trading activities.

A string of delays and extension periods written into a final version of Congress's financial regulation reform bill means that firms such as Citigroup and Goldman Sachs could exploit loopholes until 2022 before withdrawing from "illiquid" funds such as private equity. The long gestation period is an example of the degree of compromise inserted into the package following months of lobbying on Capitol Hill by powerful banks.

snip

The Volcker rule, championed by formed Federal Reserve boss Paul Volcker, stops banks from engaging in "proprietary trading" whereby they trade with their own capital, rather than clients' money. It also severely restricts their investments in high-risk hedge funds and private equity ventures.

Language in the act, according to Bloomberg News, allows for a six-month study and a further nine months of rule-making. The measure is supposed to become effective 12 months after the final rule is laid, then banks have two years to conform. But if they need to, they can apply for a three-year extension. On top of that, a five-year moratorium is available for "illiquid" funds that are hard to unwind.