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Bank watchdogs consider Volcker Rule tweak

Johnnie Pakington | Flickr Open | Getty Images

Bank regulators said Friday that they would consider exempting certain complex securities from the so-called Volcker Rule after community banks sued the agencies, warning of massive losses.

Four agencies said they were reviewing the exclusion of collateralized debt obligations backed by trust preferred securities from the rule, which limits banks' ownership of funds.

(Read more: ABA threatens to sue regulators over Volcker rule)

A group of smaller banks argued in court this week that these were common instruments, and that they faced $600 million in losses this quarter already even if they had to sell the securities only at a much later date.

"The accounting staffs of the agencies believe that ... any actions in January 2014 that occur before the issuance of December 31, 2013, financial reports should be considered when preparing those financial reports,'' the agencies said in a joint statement.

—By Reuters

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