Clifford Chance

The Federal Reserve Issues Volcker Rule Conformance Clarification

19 April 2012

On Thursday, April 19, 2012, the Federal Reserve Board issued a policy statement clarifying the manner in which the Volcker Rule prohibitions would apply and would be enforced during the statutory two-year Conformance Period.  Despite public statements by Ben Bernanke, the Chairman of the Federal Reserve Board, and others concerning the regulators' expectations with respect to compliance with the Volcker Rule upon its effectiveness, such expectations remained largely shrouded in mystery.  The guidance now provided by the Federal Reserve is a welcome formal statement that does provide a useful indication of the regulators' expectations during the Conformance Period.  As discussed below, the regulators will generally expect "good-faith" compliance efforts to be made during the Conformance Period.   

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