Large banks "sometimes have to take a position to hedge against exposure," and if the "Volcker Rule covers that type of trading, it is very difficult to stay in business if they can't actively balance their risk in some way," according to McGovern.
Mayer says he "would imagine we will see congressional hearings in fairly short order," and let's face it -- we all love these hearings, as we watch executives get grilled.
But more importantly, Congress can provide a clear direction for regulators as the Volker Rule is implemented, since "investors are going to want to know whether the institution they are investing in is adopting an approved hedging strategy or is in some exception area, and there may be a premium associated with that," according to Mayer, who adds that "the market is sometimes ahead of the regulators."
-- Written by Philip van Doorn in Jupiter, Fla.To contact the writer, click here: Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV