Federal regulators released an interim final regulation late Tuesday designed to fix a problem with the Volcker Rule that would have caused hundreds of banks to take writedowns on certain assets.

The agencies' solution would exempt from the Volcker Rule all collateralized debt obligations backed by trust-preferred securities that were issued by banks with less than $15 billion of assets. Although that ostensibly helps just smaller institutions, the new rule is worded in such a way that many large banks holding Trups-backed CDOs will also benefit.

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