proprietary trading
Volcker Rule under intense scrutinyPosted by RJ and Makay on Feb 14, 2012 |
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In dozens of comment letters filed Monday, bankers and their trade associations said the Volcker Rule would increase risk and costs for investors, hurt U.S. competitiveness and be vulnerable to legal challenge. The comments came as the world’s largest banks demanded a list of changes to a proposed U.S. ban on proprietary trading five months before the Volcker Rule is scheduled to take effect.
U.S. Regulators told lawmakers last week that they will adjust prohibitions on banks’ proprietary trading per Volcker rule restrictions, but will resist calls to altogether drop the measure that sprang from the Dodd-Frank Act. Federal Reserve Governor Daniel Tarullo, along with top officials from four other agencies, defended the rule at a House Financial Services joint subcommittee hearing in Washington.
As the the Volcker Rule undergoes revisions by government regulators, wirehouse financial advisors say that their high-net worth clients could shoulder the biggest impact from any new regulations that place investment restrictions on financial institutions. Proposed restrictions under the rule would prevent banks that take federally insured deposits from conducting proprietary trading operations and investing in hedge funds and private equity funds.
