The Multibillion-Dollar Leak

Draft of 'Volcker Rule' Hits Internet, Rocking Wall Street, Washington; 'Proprietary Trading' on Line

By SCOTT PATTERSON And VICTORIA MCGRANE
WSJ

Bankers, lobbyists and lawmakers from Wall Street to Washington scrambled to dissect, analyze and react to a leaked proposal for one of the most controversial elements of the Dodd-Frank financial-overhaul law: the "Volcker rule."

Billions of dollars are at stake for big banks, which have been working for months to shape the rule aimed at curbing risky trading activities that played a part in the financial crisis.

The latest frenzy erupted late Wednesday when a website posted a 205-page draft of a memo, dated Sept. 30, that laid out critical elements of the proposed Volcker rule.

The leak left regulators fuming and opened a new front in Wall Street's battle to soften the blow of the proposed rule. The draft gave banking industry lobbyists several days to discuss it before Tuesday, when the Federal Deposit Insurance Corp. is scheduled to consider issuing a version for public comment.

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