US regulators ease trading for Wall St. banks, stripped-down 'Volcker Rule'

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US regulators ease trading for Wall St. banks, stripped-down 'Volcker Rule'

On Tuesday, the 20th of August 2019, banking regulators of United States had handed over one of the biggest victories for Wall St. lenders, while a torn-apart Volcker rule eased trading norms for Wall St. investment banks, but drew criticism from several consumer activists including a US Democrat lawmaker who had been cautioning investors on potential risks involved in latest reform.

As beforementioned, after several hours of tentative talks, the Federal Deposit Insurance Corporation alongside the Office of the Controller of Currency had approved a much-reformed version of a so-called “Volcker Rule,” which believed to have cushioned US economy during the era of great financial depression between 2007-2009.

In financial terms, the original Volcker Rule, proposed by former Fed Chair Paul Volcker was aimed to restrict Wall St. banks from making investments over market speculation that could not benefit customers directly. Nonetheless, the potential changes in “Volcker rule”, first proposed back in May 2019, involved years of lobbying efforts by larger Wall St.

lenders likes of Goldman Sacks Group Inc., Morgan Stanley and JPMorgan Chase & Co., all of which had long been complained that the legislation was too vague and complicated. On top of that, Tuesday’s (August 20th) new rule, which came as a blessing for Wall St.

investment banks, would proffer Wall St. lenders a breather in terms of trading activity. On the flipside, following release of Tuesday’s (August 20th) verdict, several analysts were quoted saying that recent rules had been substantially different from an earlier proposal and might even become vulnerable to legal challenges.