Following the $2 billion loss by the largest U.S. commercial bank, JPMorgan Chase, financial reporters and market watchers are yet again debating the need for the “Volcker Rule”.

The Washington Post has made further calls for the rule – part of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act aimed at restricting United States banks from making certain kinds of speculative investments that do not benefit their customers – to be enacted.

In an editorial issued on May 12, the newspaper said:

“Of late, [head of JPMorgan Chase Jamie] Dimon has been deploying his influence to resist tighter federal bank regulation — specifically, the ‘Volcker rule,’ a provision of the 2010 Dodd-Frank law that would ban federally insured banks from speculating in hedge funds and the like.

“Former Federal Reserve chairman Paul Volcker argues that the separation would prevent banks from exploiting their federally insured status to take destabilizing risks. Mr. Dimon answered that the rule is an unnecessary constraint on well-managed banks like his. The public ultimately would pay for the rule, he says, in the form of higher banking costs and less job-creating capital formation. He has questioned Mr. Volcker’s understanding of modern capital markets.

“…JPMorgan’s mishap proves that even a well-capitalized federally insured bank, managed by a chief executive at the top of his game, can gamble in the markets and lose — big. In a way, that has been Mr. Volcker’s point all along.”

Paul Volcker, currently serving as Economic Advisor to U.S. President Barack Obama, will be speaking at the Salzburg Global Seminar on “Financial Regulation: Bridging Global Differences”, August 16-19, 2012.

The session will bring together regulators, bankers, economists, lawyers and other experts from different continents to discuss recent trends in regulatory reforms in the US, Europe and Asia. In addition to Volcker, speakers will also include:

• Clemens Börsig, Chairman of the Supervisory Board for Deutsche Bank
• Andreas Dombret, member of the Executive Board, Deutsche Bundesbank
• Andrea Enria, Chairperson, European Banking Authority
• Edward Greene, partner at Cleary Gottlieb Steen & Hamilton in New York
• Masamichi Kono, Vice Commissioner for International Affairs, Financial Services Agency for the Japanese Government, and serving Salzburg Global Seminar board member
• Ewald Nowotny, Governor of Oesterreichische Nationalbank.

 

Participants will assess the efficacy of the adopted and proposed reforms – such as the Volcker Rule – and will explore the extent of convergence between different global jurisdictions, highlighting key differences. They will also review the challenges to global financial supervision and international cooperation, changes in market structure and will discuss the major challenges in the area of supervision and resolution which regulators and supervisors will face in the years ahead.

More information on the session can be found here: http://www.salzburgglobal.org/current/sessions-b.cfm?IDSpecial_Event=3423

To register for the session, please click here: http://www.salzburgglobal.org/oApp/index.cfm

Financial Regulation: Bridging Global Differences - August 2012

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