NEW YORK( TheStreet) ---

The Federal Reserve will rule on Capital One's ( COF - Get Report) proposed $9 billion acquisition of ING Direct ( ING) on Monday.

Capital One, needless to say, has a lot riding on the acquisition, but the approval might have a broader impact on the sector, as it will more firmly define just what regulators deem as "too big to fail."

Eight U.S. banks- Bank of America ( BAC - Get Report), Citigroup ( C - Get Report), JPMorgan Chase ( JPM - Get Report), Wells Fargo ( WFC - Get Report), Goldman Sachs ( GS), Morgan Stanley ( MS), State Street ( STT) and Bank of New York Mellon ( BK) are currently designated as SIFIs- systemically important financial institutions.

These banks attract higher capital requirements and more regulatory scrutiny. Large regional banks such as U.S. Bancorp ( USB), PNC Financial ( PNC) and Capital One were absent from the initial list.

But the National Community Reinvestment Coalition is among those objecting to Capital One's merger with ING arguing that the combined entity, which would be the fifth largest institution in the U.S., will be another too big-to-fail institution.

If the Fed were to reject the deal , it could mean that the "systemically important financial institution" designation of the 2010 Dodd Frank Act may extend to a new range of large but not titanic sized U.S. lenders, putting industry consolidation in doubt. An approval of the deal could mean that banks with a focus on more traditional banking, as opposed to those with sizeable capital markets operations, might have an easier time pulling off sizeable deals without earning a high-risk tag from regulators.

The comment period for the controversial Volcker rule, which seeks to ban firms from making risky bets with their own capital, ends on Monday, Feb. 13. The rule, named after former Federal Reserve Chairman Paul Volcker, is expected to be implemented in July this year. But critics have said the rule is highly complex and argue that strict adherence to the provisions will increase the cost of compliance, raise the costs to the end user and reduce overall market liquidity.

The U.K, Japan and other countries have also expressed concerns that a restriction on trading sovereign bonds other than U.S. will hurt foreign sovereign markets.

Paul Volcker himself might submit a comment letter defending his rule on Monday, the Wall Street Journal reported. He is expected to argue that the ban on prop trading would make the financial system safer and ensure that firms are working in their clients interests.

The implementation of the Volcker rule could lead to a major structural change in the business model of investment banks such as Goldman Sachs and Morgan Stanley. The rule is expected to hit fixed income trading especially hard.

Greece on Sunday approved a series of unpopular austerity measures including pension and wage cuts in order to secure a second bailout package from international creditors.

The package passed in the parliament by a 199-74 vote amid heavy rioting in Athens. Euro Zone finance ministers will meet at Brussels on Wednesday to sign off on the 130 billion euro deal, which will then set the stage for negotiations with bondholders who will have to voluntarily agree to a debt swap that will result in a 50% haircut.

The fresh injection of aid and the debt swap is necessary in order for Greece to avoid a disorderly default in March, when the country will have to redeem 14.5 billion euros worth of bonds.

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