FRB Vice Chairman Says Regulators Considering Volcker Rule Changes

Board of Governors of the Federal Reserve System ("FRB") Vice Chairman for Supervision Randal K. Quarles reported that federal regulators are collaborating on a proposal to make "material changes to the Volcker Rule." Speaking at the Institute of International Bankers Annual Washington Conference, Mr. Quarles asserted that certain Dodd-Frank regulations have caused compliance challenges and imposed unnecessary burdens on foreign banking organizations ("FBOs").

Mr. Quarles argued that prior to the financial crisis, there was rapid growth of FBOs in the United States and insufficient regulation. He stated that certain post-Dodd-Frank regulatory requirements, particularly regarding the use of intermediate holding companies, had materially improved the quality of U.S. oversight. That said, Mr. Quarles characterized the Volcker Rule as an "example of a complex regulation that is not working well."