Tuesday, November 16, 2010

Wall Street Quietly Working To Undo New Financial Rules

Wall Street Quietly Working To Undo New Financial Rules

WASHINGTON -- The heavy hitters of finance lost big battles earlier this year during the overhaul of financial regulation, but they're working hard to win the war. They're quietly trying to soften, if not kill, some of the more controversial provisions.

Lobbyists for Big Finance are working hardest to neutralize the so-called Volcker Rule, which would force big banks to spin off their lucrative proprietary trading operations, in which they invest their own capital in speculative deals.

The measure_ named after its proponent, former Federal Reserve Chairman Paul Volcker -- seeks to prevent big banks from betting against trades they made on behalf of their customers, a popular practice until the financial crisis exploded in 2008. For example, big investment banks such as Goldman Sachs sold customers overvalued mortgage bonds even as they bet secretly that those bonds would default.
Read the whole story: McClatchy

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