Banks could have up to three extra years to comply with a new U.S. rule requiring firms that receive federal deposit insurance to spin off some of their swaps trading into separate arms, U.S. regulators said on Thursday.
The Office of the Comptroller of the Currency said it would "consider favorably" requests for transition periods before banks must comply with the so-called "swaps push-out" rule.
Under the rule, included as part of the 2010 Dodd-Frank financial oversight law, banks that receive deposit insurance and other government backstops have to set up separate arms to trade certain swaps.
Supporters hoped this would separate the parts of banks that are federally guaranteed from their more risky activities.
But the rule, which was tucked into the law by then-Senator Blanche Lincoln, was widely opposed by the financial services industry. Critics said it would limit the ability of banks to hedge risk and could be expensive.
The OCC said it would
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