EU launches backlash on Volcker rule
Friday 27 January 2012 - by Karina Whalley
In an interview with the Wall Street Journal on Friday, Michel Barnier, EU commissioner for the internal market, said he will contest the proposal with US Treasury Secretary Timothy Geithner in a meeting next month.
Like the EU, Japan is adamant that the extraterritorial clause is removed from the legislation and has raised concerns over the rule's adverse impact on the Japanese government bonds market due to increased operational and transactional costs of trading the bonds.
The country's central bank and the financial regulator warned that Japanese banks could be forced to dramatically reduce or even cease their US operations which would badly hit liquidity and pricing of the Japanese bonds.
The Canadian financial services watchdog wrote a letter to US authorities in December warning that the draft rules will significantly limit Canadian banks' ability to manage their risks and liquidity.
Within the US, the 298-page proposal has been blasted by industry groups for being overly complex and for potentially undermining the competitiveness of US markets. Some US regulators including commissioners of the Commodity Futures Trading Commission say the set of rules is unworkable.
The proposal is currently open for public comment until 13 February.
|Login||Register||Most read||Most commented|
Will markets in 2012 have a tougher time than 2011?