Volcker Rule - White Paper - Implications for the US corporate bond market - Oliver Wyman/SIFMA - December 2011

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Dodd-Frank Timeline, The Volcker Rule
Proposal Date Comment Deadline Final Rule Released
October 12, 2011 February 13, 2012 December 10, 2013
Dodd-Frank Timeline, "Volcker Rule," CFTC
Proposal Date Comment Deadline Final Rule Released
February 14, 2012 April 16, 2012 December 10, 2013

December 2011

The study estimates the impact of the proposed Volcker Rule on liquidity, asset valuation, borrowing costs and transaction costs. Among the findings:

  • A one-time cost borne by investors would be a mark-to-market valuation loss between $90 billion $315 billion.
  • A recurring cost to issuers would be higher yields on new debt raised to "compensate investors for holding less liquid assets." The Oliver Wyman/SIFMA estimate expects between $2 billion and $6 billion in the first year, and between $12 billion and $43 billion "at a steady state."
  • Investors may also bear an "illiquidity cost" of between $1 billion and 4 billion.

The 37-page paper explains in detail its methodology and assumptions behind its estimates.


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