The Volcker Rule, enacted in 2010 as part of the Dodd-Frank Wall Street Consumer Protection Act to address the too big to fail problem in todays interconnected global economy, has been controversial from the outset. The deadline for banks to comply with Volcker regulations has been extended several times, with the most recent deadline set for July 21, 2016. This Note examines the impact of the Volcker Rule on foreign banks, detailing the specific effects of Volcker regulations on two prominent German banks, Deutsche Bank and Commerzbank, and analyzes the countervailing European approach to regulating proprietary trading and risky investment.
This Note argues that the extraterritorial reach of the Volcker Rule should be limited in order to comply with the presumption against extraterritoriality. While there is likely no perfect solution to preventing the too big to fail phenomenon, this Note proposes one alternative, which appropriately limits the extraterritorial scope ofthe Volcker Rule while preserving a primary aim of the Volcker legislation: exempt foreign banks with only minor U.S. subsidiaries comprising less than 25 percent of the foreign banks overall operations from the Volcker Rule.