'Volcker Rule' on US banks not ready for July

The so-called "Volcker Rule" which aims to halt banks from speculative trades in their own accounts -- an issue that fed the financial crisis -- won't be ready by a July deadline, the US central bank chief said Thursday. Speaking at a congressional hearing, Federal Reserve chairman Ben Bernanke told legislators that the regulation would not be ready by the target date for implementation of July 21. "We will be working as quickly and as effectively as we can to get it done," Bernanke said. He noted the opposition from banks and the strong objections to parts of the proposed rule from foreign governments and financial institutions. The rule was a focus of much discussion at last weekend's Group of 20 meeting in Mexico City. Japan, Britain, Canada, the European Union and other countries have expressed worries that it would penalize their banks and also reduce liquidity in the markets for their sovereign bonds. "We take this very seriously," Bernanke said of the complaints. "We are in close discussions with those counterparts and of course we will be looking carefully if changes are needed and we will do what is necessary." The rule, named after former Federal Reserve chairman Paul Volcker, is part of sweeping post-crisis reforms aimed at preventing another meltdown of the financial sector. It will forbid banks from actively trading their own accounts to boost profits -- the so-called proprietary trade. But one exception mapped out would be for active trade in US Treasury bonds -- but not government bonds from other countries.