Tuesday, December 10, 2013

Regulators Complete Votes on Rule to Curb Bank Risk - NYTimes.com

Regulators Complete Votes on Rule to Curb Bank Risk - NYTimes.com: "Federal regulators voted on Tuesday to approve a rule that strikes at the heart of Wall Street risk-taking, a moment that punctuates three years of internal squabbling and bank lobbying over an effort to reshape the financial landscape. The so-called Volcker Rule, a centerpiece of the Dodd-Frank financial overhaul law and a symbol of the Obama administration’s efforts to rein in risk-taking after the financial crisis, received approval from all five regulatory agencies writing the rule: the Federal Reserve, the Federal Deposit Insurance Corporation, Securities and Exchange Commission, the Commodity Futures Trading Commission and the Comptroller of the Currency. The trading commission, though, voted in private because of inclement weather in the Washington area.....
In some crucial areas, regulators adopted a harder line than Wall Street had hoped. Under the rule, which bars banks from trading for their own gain and limits their ability to invest in hedge funds, the regulation includes new wording aimed at the sort of risk-taking responsible for a $6 billion trading loss at JPMorgan Chase last year. The rule also requires banks to shape compensation packages so that they do not reward “prohibited proprietary trading.”"

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