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At Volcker Rule Deadline, a Strong Pushback From Wall St.
The New York Times | February 14, 2012 | 11:39 AM EST

Wall Street made its broadest assault yet against new regulation on Monday, taking aim at a rule that has come to define the battle over how to police banks in the aftermath of the financial crisis.

Regulators in charge of writing the Volcker Rule, which would ban banks from trading with their own money, were inundated with complaints and suggestions on Monday, the deadline to comment on a draft proposal. More than 200 letters were expected to be filed by the midnight deadline on the rule, which regulators outlined in October.

Commenters included the rule’s namesake, Paul A. Volcker, the former Federal Reserve chairman, who submitted a strongly worded defense of the rule’s intent in a letter on Monday. Others, like consumer advocates and lawmakers, criticized the draft rule for not being tough enough.

Senators Carl Levin of Michigan and Jeff Merkley of Oregon, both Democrats, led the effort to insert the Volcker Rule in the Dodd-Frank act, the sweeping regulatory overhaul passed in response to the financial crisis. In a comment letter on Monday, the senators said the proposed rule was “too tepid.”

But the loudest response came from critics like Wall Street trade groups and banks, who want to soften the rule. The rule, the critics said, is a threat to the health of the financial industry and the broader economy.

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