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U.S. CFTC chief said to win Volcker rule ban for foreign banks -Bloomberg
December 7, 2013 / 1:35 AM / 4 years ago

U.S. CFTC chief said to win Volcker rule ban for foreign banks -Bloomberg

Dec 6 (Reuters) - 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.

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