dearJulius.com Write For Us

Federal Reserve proposes loosening of Volcker rule

SHARE:

The Federal Reserve Board and Chairman Jerome Powell issued a proposal to loosen provisions of the Volcker rule, which bars banks from engaging in proprietary trades and from owning or controlling hedge funds or private equity funds. Photo by Mike Theiler/UPI | License Photo

By Daniel Uria, UPI

The Federal Reserve on Wednesday proposed easing provisions of the Volcker rule, which prevents banks from engaging in risky trades with depositor's money.

The proposed changes would seek to apply the rule to banks with varying degrees of severity based on their trading activity and change rules surrounding what constitutes a proprietary trade, in which banks trade for their own profits.

"This proposed rule will tailor the Volcker rule's requirements by focusing the most comprehensive compliance regime on the firms that do the most trading. Firms that do more modest amounts of trading will face fewer requirements," Federal Reserve Chair Jerome Powell said.

The Volcker rule was proposed during the financial crisis and went into effect in 2013 in order to prevent banks from speculating in markets by barring them from making proprietary trades as well as owning or controlling hedge funds or private equity funds.

Banks possessing trading assets and liabilities in excess of $10 billion would be subject to the strictest rules, while those with assets and liabilities between $1 billion and $10 billion and would face "reduced compliance requirements and a more tailored approach."

Any bank with less than $1 billion in assets and liabilities would be presumed compliant under the proposal.

The proposal would eliminate an assumption that positions held by lenders for fewer than 60 days are proprietary trades.

It also would replace a portion of a test to determine whether a trade is proprietary by replacing it with criteria based on how the bank accounts for trades.

"By focusing the application of the rule on those firms with the highest levels of activity covered by the statue, and by clarifying and simplifying the compliance regime, we can promote safety and soundness while reducing unnecessary burdens," said the Federal Reserve Board's vice chairman for Supervision Randal K. Quarles.

The proposal is part of a larger effort to roll back provisions of the 2010 Dodd-Frank Act. On May 22, the U.S. House of Representatives passed a bill to raise the threshold for banks that are subject to stricter federal oversight from $50 million in assets to $250 million, releasing dozens of U.S. banks from regulations by the Federal Reserve.

COMMENTS



Note: If you think this story need more information or correction, feel free to comment below your opinion and reaction.
Like & Follow to Stay Updated ...

Name

Alabama,1,Arizona,1,Barack,1,California,3,Colorado,1,Connecticut,1,Crime,531,Florida,1,Franc,1,Hawaii,8,Illinois,1,Los Angeles,2,Massachusetts,3,Mississippi,1,New York,128,U.S.,1552,Washington,4,
ltr
item
U.S. - U.S. Daily News: Federal Reserve proposes loosening of Volcker rule
Federal Reserve proposes loosening of Volcker rule
https://1.bp.blogspot.com/-TwVV9ruSvH4/Ww-RluentpI/AAAAAAAAryI/QTISe3lMlCMtIFoZUG8tr3uPBo9Jzh8_QCEwYBhgL/s1600/3.jpg
https://1.bp.blogspot.com/-TwVV9ruSvH4/Ww-RluentpI/AAAAAAAAryI/QTISe3lMlCMtIFoZUG8tr3uPBo9Jzh8_QCEwYBhgL/s72-c/3.jpg
U.S. - U.S. Daily News
https://us.dailynews.us.com/2018/05/federal-reserve-proposes-loosening-of.html
https://us.dailynews.us.com/
https://us.dailynews.us.com/
https://us.dailynews.us.com/2018/05/federal-reserve-proposes-loosening-of.html
true
3263844984480124152
UTF-8
Loaded All Posts Not found any posts VIEW ALL Read More Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share. STEP 2: Click the link you shared to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy