WASHINGTON Dec 19 U.S. regulators said on
Thursday that banks do not need to sell certain securities
immediately under the Volcker rule, but instead have until July
2015 to decide if the investments comply with the new rules.
Bank regulators last week approved the final Volcker rule,
which restricts banks' ability to make bets with their own money
and limits their investments in certain funds.
Lobby groups and some lawmakers have since called on
regulators to address what they called an unintended
consequence. Small and mid-sized banks said that even though the
rules do not officially take effect until 2015, accounting rules
meant they could face losses sooner.
The Federal Reserve, Federal Deposit Insurance Corp and
Office of the Comptroller of the Currency said banks "are not
required to sell these holdings immediately under the final
Instead, they said, banks can use the full compliance period
to decide if their investments are allowed.
At issue are so-called trust-preferred securities, which
have characteristics in common with both shares and debt
investments. Banks worried their holdings might run afoul of the
The regulatory agencies said banks should look at whether
their holdings can be restructured to be in line with the
Volcker rule and at the extent of their investments before
deciding whether they must sell.
Some banks, including Zions Bancorp and BankUnited
, already have made changes they said were prompted by
the Volcker rule.