Bloomberg reports that the U.S. regulators are considering cutting foreign governments some slack regarding their objections to the Volcker Rule:
U.S. banking regulators are exploring whether they can exempt sovereign debt from the Dodd-Frank ban on proprietary trading after foreign governments complained that the rule could raise borrowing costs and impede the flow of capital, a person familiar with the talks said.
Five regulatory agencies are taking public comments on a proposed version of the so-called Volcker rule, which was included in the 2010 financial regulatory overhaul to ban deposit-taking banks from trading with their own money. [Emph. added]
An exemption for sovereign debt!? Of course! What could go wrong? Oh, wait. . .