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First Glimpse At Volcker Plan Impacts Firms Besides Banks
An early glimpse at the detailed "Volcker Rule", which is expected to be released this afternoon, indicates that not just bank holding companies are going to be targeted by the prop trading ban. The WSJ reports that "the White House's push to limit, or in some cases ban, certain risky
trading activities at financial companies also would affect companies
that don't own bank subsidiaries, according to a summary of proposed
legislative language prepared by the administration." This probably means that life for those pesky hedge fund scapegoatees is about to get even more unpleasant. And as for trading sovereign CDS, we suggest you novate all positions promptly.
From the Wall Street Journal:
The White House initially offered few details for how the "Volcker
Rule" would work. And Senate lawmakers, locked in discussions about how
to rewrite financial rules, are expected to water down the Volcker Rule
by giving more discretion to regulators on how best to enforce size and
risk limits at banks. This would stop short of the White House's
outright ban on certain activities.
The White House's detailed proposal, which is expected to be
released Wednesday afternoon, suggests the administration is likely to
push for tougher rules as negotiations intensify.
A summary of the White House's language details for the first time
plans to bring more federal scrutiny to any "major" financial firm,
even those that aren't banks, which engage in proprietary trading.
These companies would face tougher capital and liquidity rules and also
be forced to "provide more information to the market about their risks."
"Moreover, any financial firm that is identified for heightened
supervision under the Administration's regulatory reform proposal would
be subject to additional capital and quantitative limits on these
activities," the White House's summary said.This is significant because it means even if companies such as Goldman Sachs Group Inc. shed their commercial banking subsidiaries, they will likely face more regulatory scrutiny.
Something tells us Wells Fargo ain't going to be doing much prop trading any time soon.
Volcker seems pretty set on preventing the continued expansion of Too Big To Fail into Too Biggest To Fail:
The White House's proposal also would ban financial companies from
controlling more than 10% of the liabilities of the financial system
after an acquisition. This updates an older law that restricts banks
from controlling more than 10% of U.S. deposits after an acquisition.
The White House's new proposal could make it much more difficult for
large banks and other financial firms to grow.
And this concluding observation:
"Investors in private funds advised by banking firms must have no
expectation that the banking firm would bail out the funds in times of
stress," a summary of the White House's proposal said
Since all private funds are advised by banking firms in some capacity, does this mean that the fight with the hedge fund (aka prop trading) world just entered its second offensive? We will bring you the detailed Volcker plan as soon as it is available.
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Ah, so that's why the market suddenly nose-dived this afternoon.
That and OBama yacking again, and again and again etc etc
You can bet when the Giant Vampire Squid divests its commercial banking assets into a separate entity, it will have hidden all kinds of improvised toxic booby traps in its balance sheet to explode later on unsuspecting shareholders.
Volcker's probably going to be the center of attention at any upcoming Bilderberg, TLC, CFA, Bohemian Club meetings.
Thats not the way it works in the Mob. They have to "approve" all sanctioned hits.
Right now the White House is looking more like Tony Spilotro.
From low market volume to no market volume.
Volker is a Hurdy Gurdy Monkey. He is a side show. A great man, But he is being used.
hey Tyler,
You are def rocking the boat my man! Take a look at this!
http://www.businessinsider.com/goldman-says-matt-taibbi-zero-hedge-louis...
HA! The truth always interferes with someone!
Oh Tyler dude, time for some level IV Turtle armor.
Ballistic helmet too...
The oligarchs should have stuck to Monte Carlo with their gambling.
Why the reference to Wells Fargo? Was there any talk that they were going to do anything that looks like prop trading?
Yep! You Betcha
nothing's gonna come out of the volcker rule !! dont get ur hopes too high.
why is obama such a jackoff? can anybody please just answer me this one question
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