PHILADELPHIA Federal Reserve official Charles Plosser on Monday became the latest regulator to warn that the government may not finalize the Volcker rule by the end of this year.
"Oh boy... I don't know that we'll get there by the end of the year," Plosser, the president of the Philadelphia Fed, told reporters after a speech on Monday.
Three years after it was enacted, regulators are hurtling towards an unofficial year-end deadline to finalize the Volcker rule, a provision of the Dodd-Frank financial reform law that would ban proprietary trading and restrict bank investments in hedge funds. Treasury Secretary Jack Lew has exhorted the five regulatory agencies in charge of approving the 1000-page provision to do so by the end of December.
But in recent weeks, officials have started to indicate that they will blow that deadline. Last week, Securities and Exchange Commission Chairwoman Mary Jo White would only say that the rule would be ready "maybe by the end of the year."
Plosser had even fewer assurances on Monday.
"The regulators that means all of us, all the people involved - would like to get this done and move on, but as you well know it's turned out to be a lot more difficult than a lot of people have anticipated," he said during a question-and-answer session at a risk-management conference.
A lot of regulators and financial industry members "tried to signal that implementing the Volcker rule was going to be a lot more difficult than writing the legislation," he added. "The devil is in the details in a lot of respects, and I think we've discovered just how much detail there is to this."
When asked to identify the biggest stumbling block to finalizing the rule, Plosser demurred, but said problems have arisen from all sides. "It's everything from market-making, to... in many cases it's definition -- what do you define as proprietary trading?... That's where the biggest headaches are."
Despite the fact that a finalized Volcker rule does not quite exist, banks are currently expected to comply with it by July. The Fed is now considering extending that deadline by a year, according to the Financial Times.
Plosser confirmed that "there's a chance" of such an extension for banks, though "that will probably not make Congress happy."
He spoke to reporters after a speech at the Risk Management Association's annual conference in downtown Philadelphia.