This "point of view" offers our initial perspectives on how the final rules address the most difficult, and contentious, element of the Volcker Rule - the restrictions on proprietary trading. At this early stage, we view the final rules as a step forward. They include fundamental changes that reduce the risk of unintended, but potentially severe, consequences for market liquidity and the overall strength of the US capital markets. These changes also make the final rules more practical to implement and enforce.
Banks have had more than two years to assess the proposed rules, formulate a response, and bring their activities into conformance with their expectations of the requirements of the final rules. However, given the significant changes announced last week, even the banks who were most advanced in meeting the standards of the proposed rules face challenges going forward. The final section of our “point of view” outlines the next steps as we see them.