Five U.S. agencies will finish the Volcker rule tomorrow after more than three years of Wall Street resistance to its limits on trading and investing. Lawmakers and their allies who want to rein in big banks are ready to pounce if it isn’t strict enough.
In a major speech last week, Treasury Secretary Jack Lew argued that we need to keep pushing forward with financial reform. He made some encouraging points about the need to reduce systemic risks arising from money-market mutual funds and for appropriate funding levels at the Securities and Exchange Commission and the Commodity Futures Trading Commission, and he spoke clearly about the need for accountability of regulators and of bank executives. But a huge misconception in his remarks threatens to swamp everything.
China issued rules for trading of certificates of deposit on the interbank market, a step toward loosening control over interest rates as the government pares its role in the world’s second-largest economy.
Wall Street’s biggest lobbying groups banded together to sue the Commodity Futures Trading Commission, seeking to curb the overseas reach of its rules and rein in a regulatory barrage by its departing Chairman Gary Gensler.
Treasury Secretary Jacob J. Lew said the Volcker rule banning banks’ proprietary trading that regulators plan to vote on next week will prohibit transactions such as JPMorgan Chase & Co.’s so-called London Whale and put more responsibility on top Wall Street executives.