"Federal Reserve Board Gov. Sarah Bloom Raskin urged regulators to narrow a proposed exemption to the Volcker Rule, saying it may allow banks to avoid compliance with the ban on proprietary trading," writes American Banker's Donna Boraks.
The draft plan issued by regulators last October provided certain exceptions in which it would be permissible for federally insured banks to engage in hedging or market-making activities.
"I was concerned that, as proposed, the guardrails were too broad and would allow banks to be able to go too far off the road," said Raskin. "Further, I was concerned that the guardrails as crafted could be subject to significant abuse — abuse that would be very hard for even the best supervisors to catch."
Raskin is the only Fed governor to object to the proposed draft. The regulators have missed the deadline for the final rule, which was due in July 21.
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