The Volcker Rule will cost U.S. national banks as much as $4.3 billion to implement, according to a study by the Office of the Comptroller of the Currency.
The regulator estimates implementation costs between $413 million and $4.3 billion for banks it supervises, the OCC said in a report released today. Most of the potential costs come from the rule's curbs on certain holdings, such as in portfolios of some collateralized debt obligations. The agency also said affected banks will mostly be those with more than $10 billion in assets and could include as many as seven community banks.
The Volcker Rule, which bans banks from trading with their own money and limits their stakes in certain private funds, was adopted Dec. 10 by five U.S. financial regulators. The rule, named for former Fed Chairman Paul Volcker, imposed the restrictions in response to the 2008 credit crisis.
Regulators have already responded to some Volcker Rule complaints by the banking industry. On Jan. 14, the agencies moved to shield some collateralized debt obligations backed by trust-preferred securities after community banks said they would be harmed. The regulators have since formed an interagency group to coordinate how the multi-agency rule will be implemented.