Paul Volcker: Volcker Rule 'More Complicated Than I Would Like'
The Volcker rule is too long and complicated and financial lobbyists are to blame, said the man who gave his name to the new regulation on bank trading.
"It's much more complicated than I would like to see," said Paul Volcker during a university talk in Singapore on Wednesday.
The Volcker rule is meant to prevent American banks from making big bets on markets with their own money or from backing private equity and hedge funds.
The 300-page proposed version of the rule, due to come into force next year, was released by the Federal Deposit Insurance Corp and other federal regulators last month.
Volcker, former chairman of the U.S. Federal Reserve, said lobbying by the financial industry had made the proposed regulation much more complex than it needed to be.
"There is no set of lobbyists in the United States bigger, more important and more rewarded than the financial lobbyists," he said.
However he added that the basic principle prohibiting banks engaging in proprietary trading is still contained in the law, whose purpose was reinforced last week by the collapse of brokerage MF Global.
The U.S. firm filed for bankruptcy after risky bets on debt from troubled euro zone nations scared away clients and investors.
"It reinforces the point - I don't want the banks doing the kinds of things they were doing," he said.
(Reporting by Rachel Armstrong; Editing by Erica Billingham)
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