Regulators to meet Tuesday on Volcker rule: source

[ProSense]

Regulators to meet Tuesday on Volcker rule: source

By Alexandra Alper

WASHINGTON (Reuters) - Regulators crafting the final language of the Volcker rule will confer on Tuesday and are expected to discuss how JPMorgan's $2 billion trading loss may impact their work, according to a person familiar with the matter.

The meeting, which is expected to include representatives from the major financial regulators, is a regular occurrence but will take on new meaning as more information emerges about JPMorgan's losing hedging strategy.

The Volcker rule, which was mandated by the 2010 Dodd-Frank financial reform law, bans banks from making speculative bets with firm money, but includes an exemption for trades done to hedge risk.

The proposal released in October was vague about the hedging carve-out. U.S. regulators have struggled to write an exemption that allows for bona fide hedges but prevents banks from using the exemption to disguise speculative bets.

The banking industry, including JPMorgan, has pushed for a wide exemption.

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http://www.reuters.com/article/2012/05/15/us-jpmorgan-volcker-idUSBRE84E01920120515

[DJ13]

1. Jaimie Diamon on hearing about the meeting