U.S. Regulators Examine Wall Street’s Volcker Rule Wish List - ABI

U.S. regulators are considering changes to the “Volcker rule” Wall Street has sought for years that would make it easier and cheaper for banks to comply and allow them more leeway in trading and investing, Reuters reported. Part of the Dodd-Frank reform law passed after the 2007-09 financial crisis, the Volcker rule aimed to prevent banks, such as Goldman Sachs and JPMorgan Chase, from making risky market bets while accepting taxpayer-insured deposits. The rule forced many Wall Street banks, which before the crisis could gamble on their own account across various assets, to restructure their businesses, including overhauling their trading operations and hiving off billions of dollars’ worth of investment vehicles. Yet banks and some of their customers say that the rule, which runs to more than 1,000 pages, is too much of a burden for the financial industry by limiting banks’ ability to facilitate investments and hedges for investors and depressing trading volumes in some assets. Modifications being considered include: scrapping the presumption that short-term trades are proprietary unless banks prove otherwise, making it clearer which types of funds banks are banned from investing in, permanently exempting some foreign funds from the ban, and anointing a lead regulator to oversee the rule’s enforcement.

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