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OCC's Walsh: US Banks At Disadvantage Because Of Volcker Rule

Published Wednesday, 18th January 2012 03:13 am - © 2012 Dow Jones


U.S. banks will operate at a competitive disadvantage with foreign institutions because of new regulations being imposed on them by the Volcker Rule, a top bank regulator said in testimony prepared for a hearing Wednesday.

"Foreign jurisdictions have not adopted restrictions resembling those in the Volcker Rule," said John Walsh, acting Comptroller of the Currency, in remarks prepared for a hearing Wednesday. "A foreign bank that is not subject to [the provision] because it does not have the requisite U.S. banking operations will remain unaffected by the Volcker Rule. Accordingly, U.S. banks competing with these foreign banks will operate at a competitive disadvantage."

The Volcker Rule, named after an idea suggested by former Federal Reserve Chairman Paul Volcker, would prohibit big insured banks' speculative proprietary derivatives and stock investments. It also seeks to limit banks' investments in hedge- and private-equity funds in an effort to reduce risks to the broader financial system. Regulators have introduced a proposal to implement the Volcker rule and interested groups have until Feb. 13 to submit comments.

-Ronald D. Orol; 415-439-6400;

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