Bernanke Wants to Ensure Volcker Rule Doesn’t Impair Liquidity

Federal Reserve Chairman Ben S. Bernanke said the Fed will attempt to ensure a regulation aimed at limiting risk-taking by banks doesn’t impede liquidity in global financial markets.

“The Volcker rule raises a lot of complexities, including some international differences,” Bernanke said today in reply to audience questions after a speech in Stone Mountain, Georgia.

“We have heard a number of concerns made” from regulators outside the U.S. that liquidity in foreign government securities could be impaired, Bernanke said. The Fed will “support the market making function and the liquidity in critical financial markets,” he said.

The so-called Volcker rule, named for its original champion, former Fed Chairman Paul Volcker, is aimed at reducing the odds that banks will make risky investments with their own capital and put depositors’ money at risk.

Bernanke said on Feb. 29 that the central bank and other regulators won’t meet the July deadline to complete work on the Volcker rule. The Fed has received over 17,000 comment letters on the proposal.

To contact the reporter on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net

Steve Matthews in Stone Mountain, Georgia at smatthews@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net