FDIC approves Volcker revamp

Blueneck

Former Staff
Jun 2007
57,313
46,436
Ohio
The Federal Deposit Insurance Corp. board voted 3-1 Tuesday to give big banks more leeway to make risky short-term bets in financial markets by loosening a landmark but highly contentious regulation known as the Volcker rule.

The FDIC and four other independent agencies have dropped their proposal to tie the rule to a strict accounting standard — a move that banks argued would have made it more burdensome by subjecting additional trades to heightened supervision. Instead, regulators will give banks the benefit of the doubt on a much wider range of trades, according to the text of the final rule.
Why do we trust that banks aren't going to go broke and take the whole economy with it again?

As amended, “the Volcker rule will no longer impose a meaningful constraint on speculative and proprietary trading by banks and bank-holding companies benefiting from the public safety net” of insured deposits, Gruenberg said.

Banks, meanwhile, applauded the new rule.
Tells you all you need to know right there.

But if anyone's interested, here's the link:

 
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Reactions: Friday13
Oct 2019
24
3
Toronto, Canada
It's interesting that the board voted 3-1. That vote wins it.

Banks are more likely now to make risky short-term bets in financial markets.

I think this means the accounting standards are less strict in this way. Banks are given more freedom on a range of issues. Good luck to banks in making the correct investment decisions.