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Wall Street and lobbying groups are sending the U.S. financial regulators a not-so-subtle message regarding the so-called Volcker rule asking them to slow down or they may face each other in court.
In letters sent to regulators on Monday, the group said that they do not believe the agencies took the time or made an effort to weigh the costs involved in the new prohibition on proprietary trading by banks on the economy or the business community.
The crackdown on trading, the guidelines of which are written by regulators, is named after Paul Volcker, the former Federal Reserve Chairman who advocated the idea.
The letters sent by the groups are full of reminders that the courts already have struck down one rule required by the Dodd-Frank financial oversight law of 2010 for this same reason.
David Hirschmann, the president of the Center for Capital Markets Competitiveness of the U.S. Chamber of Commerce, said, “If it comes to this being litigated, it is one of the issues for the courts.” The organization was one of those that filed a letter with the Securities and Exchange Commission, the Federal Reserve, and other regulators involved in writing the rule.
The groups also claimed that the July effective date of the rule is coming up soon. They asked the regulators to permit the ban to be gradually phased in instead of having it apply right away to all trading markets.