Sweeping banking reforms are coming to the United States banking system. Deregulation is the game:
***Fed, OCC officials agree that Volcker Rule is too complicated
***OCC acting chief supports the Treasury’s deregulatory agenda
Top U.S. banking regulators are keen to gut the Volcker Rule, stress tests and other inconvenient constraints on Wall Street after the Trump administration recently issued a long list of proposals last week for rolling back post-crisis financial rules.
As Bloomberg reports, “Federal Reserve Governor Jerome Powell and acting Comptroller of the Currency Keith Noreika plan to tell lawmakers Thursday that they support revamping key strictures. Both mentioned their agencies are open to rethinking Volcker’s trading restrictions and reducing the burden of the annual exams that evaluate banks’ ability to weather severe economic shocks.”
Gutting the Volcker Rule is the top priority. The rule, which was implemented in an effort to restrict banks from making speculative market bets with their own capital and investing in hedge funds and private-equity firms.
Backers of the rule say it guards against speculation that could lead to another costly government bank bailout, as the rules keep taxpayer-backed banks out of some risky investments, according to testimony released on Wednesday ahead of a Senate hearing.
President Donald Trump has favored less restrictive banking rules to boost lending and spur economic growth. But Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), which insures bank assets, warned it could be risky to loosen the rules too much, reports Reuters.