WASHINGTON -- Christmas came early for Wall Street this year.
The Federal Reserve on Thursdaygranted banks an extra year to comply with a
key provision of the Volcker Rule, a move that gives financial lobbyists more
time to kill the new regulation before it goes into effect.
The Volcker Rule is a key element of the 2010 Dodd-Frank
financial reform law that bans banks from engaging in proprietary trading --
speculative deals that are designed only to benefit the bank itself, rather
than its clients. Thursday's move by the Fed gives banks an additional year to
unwind investments in private equity firms, hedge funds and specialty
securities projects. The central bank also said it plans to extend the deadline
by another 12 months next year, which would give Wall Street a two-year
reprieve through the 2016 presidential election.
The Fed's delay comes less than a week after Congress granted
Wall Street a reprieve from another reform that had been mandated by the 2010
Dodd-Frank financial reform law. The measure, known as the swaps push-out rule
had eliminated federal subsidies for trading in risky
derivatives -- the complex contracts at the heart of the 2008 banking meltdown.
Bank watchdogs say the Volcker Rule delay adds insult to injury.
No comments:
Post a Comment