FDIC Votes to Adopt Volcker Rule; Will Aim to Stem 'Risky' Trading at Banks (C) (JPM) (BAC)
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The Federal Deposit Insurance Corp. (FDIC) voted to approved the Volcker rule, according to headlines hitting the wires Tuesday.
The 5 - 0 voted by the FDIC will implement a rule on banks which bans proprietary trading, but allows for trading on behalf of customer, otherwise known as market making. It will risk some of the compensation arrangements that provides for riskier trading among the institutions.
The Volcker rule is part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010.
Ahead of the vote, Fed chairman Ben Bernanke commented,
Comptroller of the Currency and FDIC board member Thomas Curry said that the rule would make the financial system safer, commenting,
Large bank stocks, like BofA (NYSE: BAC), JPMorgan (NYSE: JPM), Citi (NYSE: C), and Goldman Sachs (NYSE: GS), are on watch following the vote.
The 5 - 0 voted by the FDIC will implement a rule on banks which bans proprietary trading, but allows for trading on behalf of customer, otherwise known as market making. It will risk some of the compensation arrangements that provides for riskier trading among the institutions.
The Volcker rule is part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010.
Ahead of the vote, Fed chairman Ben Bernanke commented,
The ultimate effectiveness of the rule will depend importantly on supervisors, who will need to find the appropriate balance while providing feedback to the Board on how the rule works in practice.
Comptroller of the Currency and FDIC board member Thomas Curry said that the rule would make the financial system safer, commenting,
During 2014, we will develop the necessary examination procedures and training to ensure that our bank examiners have the tools they need to do the job.
Large bank stocks, like BofA (NYSE: BAC), JPMorgan (NYSE: JPM), Citi (NYSE: C), and Goldman Sachs (NYSE: GS), are on watch following the vote.
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