* Banking groups want more time to comment on proposal
* Wall Street opposed proprietary trading ban
By Dave Clarke
Dec 1 (Reuters) - Large U.S. banks are asking regulators for more time to comment on a proposed rule to implement a ban on proprietary trading that Wall Street bitterly opposes.
In a Nov. 30 letter to regulators, lobbying groups representing the banks said the so-called Volcker rule was so complex that the comment period should be extended beyond the Jan. 13 deadline. The proposed rule was released in October.
“Our members are deeply concerned about the potential impact of the proposal on capital formation, markets and liquidity for a range of asset classes and on the safety and soundness of banking entities and the businesses in which they engage,” said the letter, which was signed by the American Bankers Association, the Financial Services Roundtable, the Securities Industry and Financial Markets Association, the Financial Services Forum and the Institute of International Bankers.
The groups, which represent banks such as JPMorgan Chase , Bank of America and Goldman Sachs , sent the letter to the Federal Reserve, the Federal Deposit Insurance Corp, the Office of the Comptroller of the Currency and the Securities and Exchange Commission.
The groups said the Commodity Futures Trading Commission had yet to release a proposal on the part of the ban it would be responsible for enforcing.
They asked the regulators to extend the comment period for 90 days beyond Jan. 13 or for 60 days after the CFTC releases its proposal, whichever comes later.
The Volcker rule would prevent banks that receive government backstops like deposit insurance from making risky trades with their own funds in securities, derivatives and other financial products. It was named for former Fed Chairman Paul Volcker, who championed the measure.
The rule was included in the 2010 Dodd-Frank financial oversight law, enacted in response to the 2007-2009 financial crisis.
The rule would also prohibit banks from investing in or sponsoring, beyond a small amount, hedge funds or private equity funds.
The Obama administration has pushed back against attempts to slow down implementation of any part of Dodd-Frank.
“If these efforts to weaken reform are successful, then consumers will be more vulnerable to future abuse, businesses will be more vulnerable to future contractions in credit availability caused by financial mistakes, and the economy will be more vulnerable to devastating crises,” Treasury Secretary Timothy Geithner said in a speech on Thursday addressing financial reform in general. He did not specifically mention the Volcker rule.