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Don’t sweat the Volcker rule: EY

Wall Street may be fretting before Tuesday's release of long-awaited regulations on implementing the Volcker rule, but the impact isn't likely to be huge, a banking expert said.

"I don't think, whatever happens, the impact is going to be huge. Most of the large consequences have already filtered through to most of major Wall Street players," said Keith Pogson, a managing partner at EY for financial services, told CNBC.

"This year, we're seeing an emergence of political and social influences that are driving financial services just as much as anything else. The big banks will really have to comply," he said.

(Read more: Rule that curbs bank risk-taking nears approval)

After years of consultations, mostly behind closed doors, U.S. regulators on Tuesday will release the final version of regulations to implement the Volcker rule, part of the 2010 Dodd-Frank law aimed at reforming the Wall Street practices which led to the global financial crisis.

The Volcker rule would force banks to curb proprietary trading and limit investments in hedge funds and private equity funds and is named after former Federal Reserve Chairman Paul Volcker.

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Three of the five bodies responsible for the regulations – the Federal Reserve, the Federal Deposit Insurance Corp. and the Commodity Futures Trading Commission – have all scheduled public meetings to vote on the rules Tuesday. The Securities and Exchange Commission and the Office of the Comptroller of the Currency don't plan public meetings; the SEC's five commissioners will be voting on paper ballots and will release the results Tuesday.

(Read more: Wall Street frets as Volcker Rule nears vote)

The financial industry largely opposes the rules, citing a hit to profits and concerns that curtailing proprietary trading will limit their ability to effectively hedge market risks; legal challenges to the regulations are considered likely.

"It's a really blurry line," said Pogson. "When are you holding a position to be a market maker? When are you holding a position as a hedge? It's very difficult to say. It's going to be a never-ending story in terms of justifying this," he said.

Once the regulations are released, "we're going to have this legal frenzy as the lawyers go through, work out what it means. Then we'll see if they want to challenge it," Pogson said.

But he added, "now as compared to before 2007, before the financial crisis, I think the regulatory mindset and the market mindset is really different." He expects the bigger players won't try to make a major end-run to seek legal loopholes.

(Read more: Why I'm voting no to Volcker: SEC Commissioner)

"The political processes and social pressure will try and stop the big players form doing very large arbitrages of the rules," he said.

The industry's opposition to the rules took a hit after big Wall Street player JPMorgan took losses of more than $6 billion in 2012 due to the so-called London Whale trades, named for the huge, highly risky proprietary positions.

To be sure, not everyone in the industry is lining up in opposition.

(Watch: Bracing for Volcker rule surprises)

"The further we get away from 2008, the more investors forget how devastating it was. We're talking about financial Armageddon here. Yes, this could cost banks over $40 billion in lost business. But there's got to be some type of regulation," said Steve Holland, CEO of retirement wealth advisor Holland Group, which has around $2 billion under management.

"Enough of this 'too big to fail,'" Holland told CNBC. "Our economy is still walking with a limp," he added.

"I'm one independent broker here in the States that is looking for regulation, looking for the average investor out there to feel a little more comfortable in the regulatory environment," he said.

By CNBC's Leslie Shaffer. Follow her on Twitter: @LeslieShaffer1

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