Make No Bonds About It: Exempting Foreign Government Obligations From The Volcker Rule


U.S. financial regulators are considering exempting foreign government obligations from the Volcker Rule’s prohibition on proprietary trading. Bank Holding Company Act § 13(d)(1)(J), added by Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, governs such exemptions and sets a very high standard for regulators seeking to utilize them. This provision requires that four regulatory agencies unanimously agree to the exemption and determine that it satisfies a strict substantive standard—that it “promote[s] and protect[s] the safety and soundness of the banking entity and the financial stability of the United

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