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Fed’s Delay of Parts of Volcker Rule Is Another Victory for Banks

"The banks may now press to hold onto investments in some of their funds until 2022, since Dodd-Frank envisions an extra five-year extension for funds that are “illiquid,” the financial term for something that is hard to sell quickly."
 
"Consumer advocates are disappointed with the delay until 2017. They said that they did not accept the Fed’s argument that markets could be roiled if the banks had to sell their fund investments by July 2015."
 
"More broadly, the consumer advocates say, it looks as if the banks deliberately held onto many of their fund investments, betting that the Fed would grant them more time."
 
“It’s absurd that these banks can’t sell their investments in seven years,” said Dennis Kelleher, the president of Better Markets, a group that supports strong financial regulation, “They have completely hoodwinked the regulators into buying their laughable arguments.”
 
"Mr. Kelleher notes that Sifma, an industry group, sent a letter to the Fed in October saying that its members had 2,965 funds that they considered to be illiquid. “It is just not possible that 3,000 funds are illiquid for seven years,” Mr. Kelleher said."
 
Read the full article by Peter Eavis here.

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