Dec 6 U.S. Commodity Futures Trading Commission
chief Gary Gensler has convinced regulators to insert new
language into the Volcker rule restricting foreign banks from
evading the rule, Bloomberg reported on Friday.
The new language, which clarifies the Volcker rule's
definition of trading solely outside the United States, ensures
that banking giants such as Deutsche Bank AG and
Barclays Plc are not an exception to the regulation's
ban on proprietary trading, according to the report, which cited
sources briefed on the change.
Gensler and the CFTC were not immediately available to
comment to Reuters.
The CFTC was earlier sued by three Wall Street trade groups
to fight the tough overseas trading guidelines and accused it of
making changes to the guidelines without seeking public input.
The Volcker rule is a particular section of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, designed to ban
U.S. banks from making proprietary investments by separating
their business practices.
Gensler has been concerned that the foreign provisions in
the Volcker rule need to be tightened to avoid another "London
Whale," the report said.
The London Whale debacle involved JPMorgan Chase & Co
losing $6.2 billion because of risky bets in derivatives
by employees of its London office.
Three U.S. regulators - U.S. Federal Reserve and two other
finance watchdogs - have called for meetings to vote on the
Volcker rule. A total of five agencies need to approve the rule.