Big Banks to Get Reprieve from Volcker Rule.
Source: NYT
Big banks are getting a big reprieve from a post-crisis rule aimed at curbing risky behavior on Wall Street.
Federal bank regulators on Wednesday unveiled a sweeping plan to soften the Volcker Rule, opening the door for banks to resume some trading activities restricted as part of the 2010 Dodd-Frank law. The changes would give the largest banks significant freedom to engage in more complicated -- and possibly riskier -- activities by largely leaving it up to Wall Street firms to determine which trading is permissible under the rule and which is not.
The Federal Reserve, along with four other regulators, took steps on Wednesday to ease several parts of the Volcker Rule, which was put in place to prevent banks from making risky bets with depositors' money. The rule, which took the agencies more than three years to write, has been criticized by Wall Street as onerous and harmful to the proper functioning of financial markets.
Regulators said on Wednesday that the rule's intent will remain in place but that the regulation needed to be simplified so that banks can more easily comply with it and Washington can adequately enforce it.
Read more: https://www.nytimes.com/2018/05/30/business/volcker-rule-banks-federal-reserve.html?
"The proposal will address some of the uncertainty and complexity that now make it difficult for firms to know how best to comply, and for supervisors to know that they are in compliance," Fed Chairman Jerome H. Powell said in prepared remarks ahead of a Board of Governors meeting. "Our goal is to replace overly complex and inefficient requirements with a more streamlined set of requirements."
The proposal, which will be open to public comment and may change before being finalized, was supported by all three sitting Fed governors.
Among the biggest proposed change outlined on Wednesday: Banks will no longer have to specifically prove that each of their trades serves a clear purpose that goes beyond a speculative bet. The proposal would allow banks to more freely engage in hedging, in which they execute trades in an effort to counteract risk in other parts of their businesses. Such trading had been curtailed by the Volcker Rule, which required banks to show regulators specifically how each trade acts as a hedge against specific risks.
Regulators are proposing to relieve banks of that responsibility. That would put the onus on regulators to prove that a trade was not done to hedge an actual risk.
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8 million people lost homes, and the taxpayers bailed them out..............what could possibly go wrong.................a lot..................they have an asshole gutting the CFPB and now this...............what could possibly go wrong................a lot....................2019 is going to be a bad year this market is going to crash.....................
