PRINCETON, N.J., April 4 (Reuters) - Daniel Tarullo, the outgoing Federal Reserve governor, on Tuesday said parts of the existing Volcker rule have proved unworkable and that annual stress tests of leading Wall Street banks may not need a ‘qualitative’ review.
“As it has been drafted and implemented, the Volcker rule is too complicated,” Tarullo said in a speech at Princeton University.
The Volcker rule is meant to prevent banks from using customer deposits to make investor bets.
Tarullo also said annual checkups for Wall Street may be too complicated. The yearly ‘stress test’ considers both financial matters and subjective concerns like management. Tarullo said those ‘qualitative’ benchmarks could be eliminated in time.
For eight years, Tarullo has authored Wall Street rules to prevent financial shocks and a taxpayer-funded bailout of banks. But he is stepping down and Tuesday’s speech would be his last. (Reporting By Patrick Rucker in Washington. Jonathan Spicer in Princeton.; Editing by Chizu Nomiyama)