Banking groups from overseas are said to be stunned with the level of banking compliance they will have to adhere to under the Volcker Rule to operate in the US.
The Volcker Rule looks to prevent banks from engaging in proprietary trading, which is deemed to be excessively risky and not in the best interests of customers.
Non-US banks that have a branch in the States will be allowed to engage in proprietary trading, but it seems the particulars of the Volcker Rule require them to follow a complex compliance code.
One lobbyist at a European bank in Washington, DC, told Risk Magazine that his firm was "stunned" to see how much legislation is involved.
Among the many requirements of the Volcker Rule is the need for each bank to provide US regulators with a list of every trader in the organization, detailing the nature of his or her trading activity.
"We had no idea it would contain this kind of overreach. The obligations that will be placed on entities based overseas will be overly burdensome to say the least, and I’m not sure how we are going to comply with it," the lobbyist said.
Posted by Paul Newton
