Six of the largest U.S. banks have already taken steps to shut down their proprietary trading operations in anticipation of a ban known as the Volcker rule, U.S. Comptroller of the Currency Thomas Curry said.
In a letter to U.S. Representative Carolyn Maloney, Curry identified the six banks as JPMorgan Chase & Co., Bank of America Corp., Citibank NA, Morgan Stanley, PNC Financial Services Group Inc. and Wells Fargo & Co.
Curry said it was too soon to determine whether the banks were already in compliance with the rule, which is still being revised by five U.S. regulators. Curry’s letter, dated yesterday, was in response to a question from Maloney, a New York Democrat, at a June 19 congressional hearing.
“Until a final rule adopting a definition of proprietary trading exists, it is difficult to gauge the extent to which actions already taken to shut down trading desks fulfill the requirements under the Volcker rule to cease all proprietary trading,” Curry said.
The measures taken by the lenders show that “many large banks have recognized the validity of the Volcker rule and the risk in trading for their own gain at the same time they are working for their customers’ benefit,” Maloney said in an e-mailed statement today. “I applaud these institutions who are not waiting for the final rules but who recognize that Dodd-Frank is the law of the land.”
The Volcker rule, part of the Dodd-Frank Act’s overhaul of financial regulation, is intended to limit activities that put customers’ federally insured deposits at risk. Regulators have said they hope to finish the rule by the end of the year and have given banks until July 2014 to implement it as long as they make a good-faith effort to comply.