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Class Twenty-Four: November 7, 2014
We will spend this class looking at activities restrictions imposed by the Dodd-Frank Act, using the proprietary trading portions of the Volcker Rule as a case study. To refresh your memory of traditional activities restrictions at the holding company level, skim the Research Memorandum on Commodities Activities. As an introduction to the Volcker Rule, you may find it helpful to start with these two press accounts: Volcker Rule, Once Simple, Now Boggles, New York Times (Oct. 21, 2011); and Volcker Defends His ‘Rule’ From Critics, Financial Times (Oct. 26, 2011). We will then take a look at the Volcker Rule itself, asking whether the rules constitutes an activities restriction or an implied structural restrain on financial holding companies. How does the rule compare with the Glass-Steagall Act. Read the Davis Polk slides comparing Volcker, Glass-Steagall, Vickers and Liikanen changes, the statutory text of the Volcker Rule (focusing on the proprietary trading sections only) as well the Sullivan & Cromwell Memorandum on the final Volcker Rule regulations and the Guynn & Kenadjian article on Volcker, Vickers, Liikanen, Glass Steagall and Narrow Banking.
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