Source:
Wall Street JournalKey senators are expected to scrap President Barack Obama's proposal to prohibit commercial banks from certain risky trading activities, people familiar with the matter said, a setback for the administration's bid to limit the size and scope of the largest U.S. banks.
The proposal, dubbed the "Volcker rule" after former Federal Reserve Chairman Paul Volcker, would have essentially prevented any commercial bank with federally insured deposits from owning a division that makes speculative bets with its own capital.
But after resistance from lawmakers from both parties, Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and other legislators are expected to introduce a plan next week that would give regulators more discretion to limit and potentially ban risky trading at banks, especially if it poses a risk to the broader economy. The measure would stop short of banning such trading outright.
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The provision in its original form, if enacted, could force companies such as Goldman Sachs Group Inc., Morgan Stanley and J.P. Morgan Chase & Co. to shed certain divisions or reorganize their business practices. It has won support from several former Treasury secretaries but triggered a violent reaction on Wall Street, helping send the Dow Jones Industrial Average into a three-day slide after its announcement.
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http://online.wsj.com/article/SB10001424052748703503804575083823511212204.html?mod=igoogle_wsj_gadgv1&
Wall Street wins again. The USA takes another step toward its demise.
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