Which parts of a bank operating outside the US will the Volcker Rule affect?

Apart from the strategic implications, the Volcker Rule will require banks' non-US businesses to strengthen governance arrangements, update operational functions and implement a new compliance programme once the bank has identified all affected areas of the business. Here are some examples of the areas that could require changes by 21 July 2012.

Governance

  • Governance and supervision of trading activity (and evidencing this)

Front line controls

  • Prevent controls around prohibited activity or exemption breaches
  • Review of risk limits and monitoring
  • Training roll out

Testing

  • Independent compliance testing and record keeping

Data and reporting

  • Calculation of 17 or more metrics on a daily basis at the trading desk level
  • Internal and regulatory reporting against metrics
  • Substantial data aggregation and monitoring on a daily basis

Policies and procedures

  • Development and implementation of group-wide policies and procedures in relation to the Volcker Rule requirements, for example relating to trading, market making and hedging activities
  • Trader mandate changes

PwC has worked with clients to determine whether their activities are captured by the Volcker Rule requirements and to analyse gaps between their current arrangements and the Volcker Rule requirements. Speak to one of our experts to find out what parts of your business will be affected.

How will the Volcker Rule affect non-US banks?
Strategic and operational impacts of the Volcker Rule for non-US banks