Bonnie J. Roe of Cohen & Gresser writes: In general, the Volcker Rule takes a principles-based approach in identifying prohibited activities. While this approach may provide needed flexibility to banking entities in structuring their compliance programs overall, the vagueness of the requirements may pose challenges in designing effective incentive compensation plans or ensuring that the plans, once designed, will conform to the requirements.
Lanny A. Schwartz and Hilary Sunghee Seo of Davis Polk & Wardwell focus on the use of targeted returns, which appear to be treated as performance projections in some FINRA Enforcement cases.
Anna T. Pinedo and Oliver I. Ireland of Morrison Foerster write: It is still unclear how the different regulatory requirements will interact to shape bank balance sheets and how they will affect access to financial services for banks’ commercial customers. It is clear, however, that these requirements will have significant impacts on how banks finance, how they invest, the business that they conduct, and their willingness to lend.
Derrick D. Cephas and Dimia Fogam of Weil, Gotshal & Manges discuss the FDIC’s “Single Point of Entry” strategy, which addresses a still unresolved major public policy concern and related “too big to fail” issues.