In a rare interview, former Federal Reserve Chairman Paul Volcker told CNBC that his namesake rule has already changed the way Wall Street does business, despite the delays in crafting the final draft of the rule, which regulatory officials now say won't happen until next year.
(Read More: No Volcker Rule Until 2013: Sources)
Volcker's originally proposed rule — as part of the 2010 Dodd-Frank Wall Street Reform Act — was intended to restrict U.S. banks or an institution that owns a bank from executing riskier trading strategies for the firm's personal account while putting their customers money at risk. Critics of such "proprietary trading" say the typical strategies and volatile returns often resembled the speculative nature of a hedge fund than a bank. (Learn more here.)
Volcker told "Squawk Box" co-host Andrew Ross Sorkin that the rule has already been effective.
"Banks have stopped their straightforward proprietary trading operation, and they've largely cut back on their hedge funds and equity funds," Volcker said in the interview broadcast Thursday. "And as the managements and the directors finally understand that, 'Yes, this is a law that has to be followed,' they'll be able to manage their trading desks in what I think is an effective way."