With the release of the Volcker rule, the Dodd-Frank Act’s regulatory overhaul is largely complete, giving banks a new degree of certainty about the limits of their business in the wake of the 2008 credit crisis.
Thirteen years after Credit Suisse Group AG crowned itself Wall Street’s new junk-bond king by buying Donaldson Lufkin & Jenrette Inc., the last vestiges of its reign in the most lucrative credit business are being squeezed out by post-crisis banking regulations.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said banks will have to charge more for lending to get a “fair return” as regulators require the industry to set aside more funds to cushion against losses.
Paul Volcker said he wasn’t involved with writing the final version of the rule that bears his name, staying abreast of developments from a distance as regulators crafted details of his curbs on trading by banks.
U.S. financial regulations that curb banks’ ability to speculate with their own money included an exemption for the $3.7 trillion municipal bond market after issuers complained the rules could increase borrowing costs.