Anything that tries to delineate proprietary trades from market-making trades and legitimate hedge trades is going to be complex.

You have to give the regulators credit for even taking this on. We're seeing the rise of the some interesting metrics and processes in terms of keeping all this straight. The sheer complexity of it all is daunting. The IT challenges will certainly not be trivial. So we should not be surprised that even the regulators are at odds over the specifics of the rules.

"Though several federal agencies agreed last week to propose the initial version of the Volcker Rule, they are divided over some of its crucial details. The Federal Deposit Insurance Corporation, for example, has pushed for tough language that would require bank executives to vouch for their compliance with the Volcker Rule--a measure that the Office of the Comptroller of the Currency has been fiercely resisting, say people close to the regulators," notes the New York Times.

The CFTC has raised perhaps the most important point, noting that the regulatory agencies need to be cognizant of the costs and benefits. This looms as crucial in the light of the court action that struck down the SEC's proxy access rule recently, faulting the agency for the lack of strong cost analysis. Of course, that argument could work in a lot of areas, as the issues are hard to analyze in strictly quantifiable ways. We do think the rule will be challenged aggressively.

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