Banks' supervisors approve rule to ease the ban on risky transactions on Wall Street

Two federal bank regulators voted Tuesday to approve a major reduction in the controversial ban on risky transactions adopted as a result of the 2008 financial crisis.

The Federal Deposit Insurance Corporation (FDIC) and the Office of the Controller of Money (OCC) on Tuesday adopted a weakened version of the "Volcker Rule," which prohibits banks from making high-risk bets with their own assets.

While the OCC and the FDIC are just two of the five agencies that must approve the new Volcker rule, approval of the proposal is the first step in a massive lobbying victory by some of the largest US banks.

The Volcker rule was one of the provisions of the 2010 Dodd-Frank Wall Street Reform Act to outlaw the risky and overly complex investments that contributed to the collapse of the global financial system in 2008.

While bank advocates have struggled to soften several aspects of Dodd-Frank in the nine years since its adoption, companies with huge trading houses such as Goldman Sachs have paid close attention to the Volcker rule.

Named in the honor of his senior lawyer, former US Federal Reserve Chairman Paul Volcker, this rule prohibits banks from "clean" transactions, or investments using their own capital. Industry advocates insisted that, while banks favored tighter risk limits, Volcker's rule was too complex and too cumbersome to be effective.

"The new Volcker rule, finalized today, recognizes that the original rule was too complex and impractical," said Greg Baer, ​​president and chief executive officer of the Bank Policy Institute's research and defense representing 17 of the largest banks and financial companies.

"The changes made to the new rule will help reduce the incidental damage caused by the original rule to responsible banking activity and legitimate market-making activity, as well as the costs of setting up massive and unnecessary compliance that she imposed. "

Advocates of stringent banking rules, however, said Volcker's rewrite broke the rule and did nothing to prevent the rise in risk that led to the 2008 financial crisis.

"As leverage and global uncertainty threats grow, greedy banks and regulators on Wall Street are determined to endanger the financial system and working families," Sen said. . Sherrod BrownSherrod Mayor Campbell BrownDayton has granted extra security following a verbal dispute with the Trump The Hill campaign report: The battle for the Senate begins to take shape The Dayton Democrat challenges the representative of long date of the NEXT GOP (D-Ohio), who ranked the Democratic party in the Senate Banking Committee.

"Trump regulators continue to open a Pandora's box of risky trading and speculation at the expense of US taxpayers"

representative Maxine WatersMaxine Moore WatersF fends off bombs: Why are lawmakers cursing more than ever Banks submits to Congress, New York AG, documents relating to Russians who might have dealt with Trump: report that Maxine Waters: Force us to ban weapons from Assault or hit our … – out of Congress! MORE (D-Calif.), Chair of the House's Financial Services Committee, said the revisions "would not only risk for the US economy a new devastating financial crisis, but could also leave taxpayers at risk." to have to pay the bill again for unnecessary and tedious bank bailouts. "

Financial regulators offered a series of delays and exemptions to the Volcker rule as banks called for broader changes, but the industry virtually gave up on major solutions until Trump's election in 2016 .

Since then, Trump has been supplying bank regulators with people nominated primarily by Republicans, who have tabled several proposals to adapt the financial rules championed by their Obama counterparts.

The new rule removes the requirement for banks to prove that trades traded in order to create markets for their clients' speculative investments and that their efforts ensure that the share offerings comply with the regulation, provided that the companies comply with certain requirements for risk reduction.

The review would also exclude banks that are below certain asset thresholds from the rule, create three levels of increasing compliance requirements based on size and complexity, and allow banks to less stringent standard for calculating the risk of certain investments.

Regulators and industry advocates supporting Volcker's backtracking have called the Modest Matching Revision the rule designed to provide banks with clearer and more efficient standards.

The president of the FDIC, Jelena McWilliams, appointed by Trump, said the new rule "will provide more clarity, certainty and objectivity around the Volcker rule, while tailoring the obligations to the banks that carry out the very large majority of transactions ".