For Big Banks It's Back to Risky Business in the Trump Era

Thursday, 31 May 2018 08:30

Excerpt: "Big banks are getting a big reprieve from a postcrisis rule aimed at curbing risky behavior on Wall Street."

Jerome H. Powell, the Chair of the Federal Reserve, and his predecessor, Janet L. Yellen, have called for simplification of the Volcker rule. (photo: Erin Schaff/The New York Times)

For Big Banks It's Back to Risky Business in the Trump Era

By Emily Flitter and Alan Rappeport, The New York Times

31 May 18

ig banks are getting a big reprieve from a postcrisis rule aimed at curbing risky behavior on Wall Street.

Federal bank regulators on Wednesday unveiled a sweeping proposal to soften the Volcker Rule, a cornerstone of the 2010 law that was enacted after the financial crisis to rein in risky trading. The change would give Wall Street banks more freedom to make their own complex bets � activities that can be highly profitable but also leave them more vulnerable to losses.

The rule, part of the broader Dodd-Frank law, was put in place to prevent banks from making unsafe bets with depositors� money. It took five agencies three years to write it and has been criticized by Wall Street as too onerous and harmful to the proper functioning of financial markets. On Wednesday, the Federal Reserve proposed easing several parts of the rule, and four other regulators are expected to soon follow suit, kicking off a public comment period that is expected to last 60 days.

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