WASHINGTON — Regulators' attempt to carve out an exemption for small banks from a key part of the Volcker Rule satisfied most institutions that feared getting swallowed up in the Dodd-Frank Act provision, but left others still vulnerable to the regulation and facing significant losses.

In their interim final regulation issued this week, the regulators said it would carve out collateralized debt obligations backed by trust-preferred securities that were issued by banks with less than $15 billion of assets. By most estimates, that exclusion covers the majority of institutions seeking to avoid massive writedowns.

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