WASHINGTON, (Reuters) - The Volcker rule's restrictions on proprietary trading and hedge fund investments could put U.S. banks at a competitive disadvantage to their foreign counterparts, a top U.S. banking regulator will tell lawmakers in testimony on Wednesday.
Acting Comptroller of the Currency John Walsh noted that other countries have not adopted restrictions similar to those of the Volcker rule, and foreign banks without certain U.S. operations will likely not fall under the reform.
"Accordingly, U.S. banks competing with these foreign banks will operate at a competitive disadvantage," Walsh plans to say in testimony before a House Financial Services panel.
Walsh's comments could give momentum to the financial industry's complaints that the Volcker rule, as proposed by regulators in October, is complex and could wreak havoc on markets and the economy if implemented in a haphazard way.
U.S. regulators at the OCC, Federal Deposit Insurance Corp, Federal
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