The U.S. financial regulators announced Thursday that banks in the nation would have a cushion period of two years to comply with the Volcker Rule that would prohibit them from trading for their own profit.
The Volcker rule, named after former Federal Reserve Chairman Paul Volcker, is originally expected to take effect in this July. However, the Federal Reserve, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and other two regulators clarified that they would not enforce it until July 2014.
The rule is part of the Dodd-Frank Act, the overhaul of financial regulation enacted by President Barack Obama in July 2010. The regulators created the rule in order to restrict the kind of risky trading that hastened the financial crisis.
The two-year buffer will ease Wall Street players' worries as they fear the rule might hurt banks' profit.