WASHINGTON, Sept. 21 (UPI) -- Setting guidelines for the Volcker Rule, intended to stop banks from making risky bets, still baffles regulators, a former U.S. Federal Reserve attorney said.
The uncertainty has delayed the launch of the rule.
"The Volcker Rule regulations have unfortunately been long delayed, obviously in my mind because the agencies are having difficulties reaching agreement," Michael Bradfield, a former general counsel at the Fed, told The New York Times.
"The well-known skepticism of some in the Fed about the workability of the Volcker Rule has undoubtedly contributed to this situation," he said.
The Volcker Rule is named after former Fed Chairman Paul Volcker, who pushed for its inclusion in the Dodd-Frank financial overhaul bill signed into law in July 2010.
The rule is intended to stop banks from making bets on the market that risk their stability. It aims to stop banks from using their own money to make bets, called proprietary trading.
It is also meant to restrict bank investments in hedge funds.
When the law was written, regulators complained it may be impossible to enforce. The Times reported Friday that most of the squabbling now is over exceptions that regulators could write into the final version of the rule.
Regulators expected to announce the final version of the rule in September but that has been pushed back until November.
Various regulators are contributing input, including the Federal Reserve, the Treasury Department and the Commodities Futures Trading Commission.
The Volcker Rule has become one of the most contentious of the Dodd-Frank bill's mandates.
Republicans, including Sen. Scott Brown, R-Mass., are lobbying to broaden the guidelines for exemptions. Democrats, in turn, are lobbying to have the rule stick to the intended mandate or even have it strengthened.
Massachusetts voters may be more keenly involved with the issue than most because Brown was one of three Republican senators to vote for the Dodd-Frank overhaul bill, a key component of which he is now trying to soften.
Brown is running against Elizabeth Warren, a Harvard professor whose was an early proponent of establishing a bureau that would protect consumers in financial matters, similar to the Consumer Product Safety Commission.
The Consumer Financial Protection Bureau was established by the overhaul bill for that purpose.
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