Some 1,400 questions. A total of 298 pages. One proposal.
Monday is the deadline for financial market participants to submit final responses to the Volcker rule, the eponymous legislation aimed at banning speculative trading at commercial banks. The authorities can expect a deluge of feedback.
Responses are expected to run to hundreds of pages, creating a mountain of electronic paperwork. Big Wall Street groups are putting the finishing touches to their own submissions, polishing their arguments with an analytical rigour that was missing in the years before the financial crisis. Banking lawyers and risk officers will be spending the weekend poring over comment letters in an effort to convince regulatory authorities to tweak the rules.
They’re not the only ones, though it will take me considerably more time than the weekend. As I’ve discussed here before (see Erik Gerding’s helpful gathering of the complete set of posts for an on-line symposium on this topic), I’ve spent a good chunk of time this year analyzing the 8000 comments on the Volcker Rule solicited by FSOC in advance of their statutorily-required study, as well as the meeting logs of the five federal agencies charged with Volcker Rule implementation. (You can find that paper here)
Last week, I began a preliminary look into the comments received during the notice and comment period after the Fed, FDIC, OCC, and SEC (and, later, CFTC) NPRM, even though the comment period had not yet closed. Just a few preliminary thoughts on that, which of course may need revising after all of the comments are in and I've had a chance to more systematically examine them.
There appear to be far fewer comments during this period than during the FSOC comment period. In particular, there is less activity from the general public. At the same time, my initial impression is that these comments are more lengthy and detailed, and are more substantive (including those received from members of the general public) than those received during the initial comment period. I suspect this reflects a change in strategy by relevant Public Interest Groups, about which I will have more to say later.
One final item of interest that I have noticed is the number of criticisms of the regulatory and notice and comment process itself from some comment letters. For example, I have seen complaints that the proposed rule is too long and asks too many questions, that only financial industry members could reasonably be expected to invest the time and resources to understand and meaningfully comment on the rule, leading to one-sided input, and that interest groups have already had enough opportunity to influence the outcome of the rule and should not be afforded any more. Some of these letters are critical of financial industry efforts to influence Volcker rule implementation, and are quite well drafted.
I’ll be back with more details, as I continue to go through the comments and meeting logs and wait – along with everyone else – for final rules.