“I don’t think it’ll be ready for July,” Bernanke said, according to the Wall Street Journal. “We have a lot of very difficult issues to go through. So, I don’t know the exact date, but we’ll obviously be working on it as fast as we can.”
Regulators have struggled with the rule as close to 17,000 comments have poured in regarding the matter. Other regulators involved with writing the rule agree with Bernanke and say that it is unlikely that the work will be finished before the July 21 deadline, a person close to the process said, the Wall Street Journal reports.
The Volcker Rule would allow banks a two year period following the deadline to adhere to and comply with the rule. The Federal Reserve can even choose to allow certain banks up to three years to comply.
Named for former Federal Reserve Chairman Paul Volcker, the provision is one of the most hotly debated rules of the 2010 Dodd-Frank Act. The Volcker Rule prohibits banks from engaging in proprietary trades, which are investments made with client money. Critics have spoken out against the rule, saying that it is too restrictive and impedes U.S. competitiveness.
“Regulators need to get the regulations implementing the Volcker [Rule] right, so as not to disrupt the functioning of markets, instead of rushing to get these rules done by an arbitrary deadline,” Tim Ryan, the CEO and president of the Securities Industry and Financial Markets Association, said, the Wall Street Journal reports.
Bernanke said that the most difficult challenge that regulators face is making the distinction between proprietary trading and market-making, where banks buy and sell for customers.
“We’ll need to develop metrics and other criteria to distinguish those two types of activities,” Bernanke said, according to the Wall Street Journal.