“The Federal Reserve on Monday announced a second course correction for last year’s Volcker rule in a move that gives banks more time to divest certain loan-backed securities that are restricted under the proprietary trading ban, but that stops short of providing the changes sought by the industry.

“The announcement of a two-year extension, through July 2017, left industry groups and some lawmakers unhappy because they wanted a broader carve-out for the so-called collateralized loan obligations.

“The extension of the conformance period does not really fundamentally address the issue,” Loan Syndications and Trading Association Executive Vice President and general counsel Elliot Ganz said. “To say, ‘OK, we’re going to kick the can down the road without fixing the underlying problem’ doesn’t do what they ought to be doing.”

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“What the regulators appear to have done here is ignore the manufactured crisis and the exaggerations of Wall Street’s allies, rejected their request for a gaping loophole and sensibly passed a very small tweak that addresses the actual issue,” Better Markets President and Chief Executive Dennis Kelleher said.

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