Volcker Rule - Comment Letter - International Centre for Financial Regulation - February 13, 2012

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Volcker Rule
February 13, 2012

From the comment letter:

"The lack of clarity in the aims of the rule is made worse by the level of complexity which is the inevitable result of trying to craft a rule which contains a large number of exemptions. This is compounded by the fact that the rule tries to distinguish market making from proprietary trading on the basis of the intention of a trade by using quantitative metrics and historical comparisons. The sheer level of work involved in such a process in terms of even constructing adequate data gathering and monitoring techniques, let alone in interpreting the information correctly and consistently, will be extensive. The fact that the rule requires banks to develop a whole compliance programme for this single rule speaks volumes."

"We do not believe the proposed rule, as structured, represents a practicable, sustainable piece of regulation. The clarity which regulations need is removed by the difficulties of framing manageable exemptions, as well as the complexity of coordination among five organisations. We adopt this view not because we sympathise with the firms who will have to comply, but because the lack of clarity and serious scope for unforeseen consequences make the rule, and the activities it is intended to govern, opaque."


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