This is the last article in an eight-part series.

The writers of the Volcker Rule have moved on to other work since the law was finalized last year. Now bank examiners, torn between their current responsibilities and the need to learn numerous new regulations including the Volcker Rule, are left with the daunting task of verifying if banks are in compliance.

This summer, the largest banks in the U.S. started to report quantitative metrics to regulators as required under the Volcker Rule. As an important July 2015 compliance date approaches, bank management should be focusing on the question of whether all five relevant regulators — the Commodities Futures Trading Commission, the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission — are ready to supervise, examine, and enforce the rule in a coordinated manner.

At a February congressional bank hearing, politicians repeatedly asked how the five regulators would coordinate their enforcement of the rule. After Federal Reserve Board Governor Daniel Tarullo took the lead several times to explain the process, Rep. Patrick McHenry colorfully declared that Tarullo "is the alpha dog." But even if that label is accurate, it's unclear whether the alpha dog would be the Board of Governors or specific district banks such as the Federal Reserve Bank of New York.

Regulators should be able to enforce the Volcker Rule, but "they will first have to agree on its interpretation among them and with the bank executives," according to Standard and Poor bank analyst Rodrigo Quintanilla. The rule was left open to significant subjectivity not only by the banks, but also by the regulators.

Moreover, the market has yet to see a detailed public description of how the five regulators will coordinate supervision and enforcement. A bank could breach the Volcker Rule because of securities and derivatives issues, which are regulated by the CFTC and SEC — but these agencies do not examine the banks. 

Nonetheless, some observers say that confusion over regulatory jurisdiction can be overcome. 'At the moment banks been working on meeting this rule for a long time," Quintanilla said. "They will be able to at least comply with the spirit of the rule while discussing details with examiners."

The Volcker Rule interim exam procedures released in June by the OCC are also a useful resource for banks to understand the level of metrics granularity and documentation required by regulators. Regulators are not legally required to release exam procedures. Therefore banks' compliance officers should communicate with their specific regulators to understand what exam process will be used and whether it will be similar to the OCC's.

The rule's complexity will put a lot of pressure on bank examiners to be up to speed on the labyrinth of processes involved in securities and derivatives trading. They will also have to be familiar with how banks invest in a wide range of funds, including hedge funds, along with private equity and commodities. In addition, examiners will need to identify the hundreds of subsidiaries and special-purpose vehicles where banks tend to rather artistically house all kinds of financial innovation. And examiners will have to learn about the intricacies of how banks calculate the various Volcker Rule quantitative metrics in order to evaluate whether banks' data and models are consistently reliable and accurate.

No amount of hard work by bank examiners will matter unless they receive support from their examiner-in-charge and from professionals at regulatory agencies such as lawyers, economists, quantitative analysts and policy experts. Additionally, examiners will have to be empowered to escalate a problem up to senior regulators who have the authority to discuss potential Volcker breaches with banks. Much rests on the ability and willingness of middle management to support their examiners on the ground.

Each of the five regulators has a variety of existing statutory mechanisms to remedy non-compliance with their rules. The OCC, Federal Reserve, and the FDIC, for example, have the authority to impose cease-and-desist orders or civil money fines. Additionally, the Volcker Rule has various anti-evasion provisions that empower regulators to enforce the rule.

In 2015, examination and enforcement of the rule will truly begin. All eyes should be on senior and middle managers at bank regulatory entities to see how they support bank examiners — the real alpha dogs of the Volcker Rule.

Mayra Rodríguez Valladares is managing principal at MRV Associates, a New York-based capital markets and financial regulatory consulting and training firm. Follow her on Twitter at @MRVAssociates.