'Volcker Rule' Shrinks on Tepid Congress Reaction
February 23, 2010, Reuters

Even as the White House reiterated support for its proposed ‘Volcker Rule’ that would forbid banking organizations from using the proceeds of customer deposits for proprietary trading activities, the US Treasury seemed to back away a bit from the plan, issuing a statement saying it supports "mandatory limits" on such trading. The move was seen by some as a likely compromise with a reluctant Congress.

Former New York Federal Reserve official Ernest Patrikis said the Treasury's latest statement "absolutely" suggests a change in the administration's stance.

"They realize they are off track and that the original proposal was misdirected, too strong and ill-advised," said Patrikis, a specialist in bank regulatory issues at the law firm White and Case in New York.