At times, investment banks have blurred the line between capital raising and banned proprietary trading, Antony Currie of Reuters Breakingviews writes.
Wall Street has used block trades to move $23 bln of equity for public companies this year, almost as much as IPOs have raised. They’re a handy tool and easy way for banks to gain league-table credit. But at times the line blurs between capital-raising and banned prop trading.
A year from now, Wall Street firms have to comply with the Volcker Rule -- regulations that aim to restrict the type of trading that banks can do. Two law firms have come up with products to keep up with the rule's demands.
While proprietary trading desks are a thing of the past with the implementation of the Volcker Rule, some of the banks were also forced to take a hard look at their capital-intensive debt trading operations in the wake of steeper capital requirement norms. Show More Summary
But the party was brought to an end by the post-crisis "Volcker Rule" in the US, which effectively banned banks from speculating using their own capital. Scores of these often young, predominantly male, residents of the prop desk were shown the door.The logical next career step was to continue trading by launching their own hedge funds. Show More Summary
On a Saturday in late April, I called Geithner for the last time to talk about the Volcker Rule and a few personal facts. (“I’m almost 5-9, just below 5-9. 5-8-and-¾, something like that. You can round down, you can say 5-8. I’m relatively...Show More Summary
Gerald Epstein provides an informative, layperson-accessible update on what has become of the much-ballyhooed Volcker Rule.
Airbnb's new fund-raising round values the company at $10 billion. | A lone guy in an office joins brand-name firms on a list of top deal makers. | A look at the poison pill's relevance. | More fighting over the Volcker Rule.
``The Fed said banks would have two additional years to make sure their collateralized loan obligations don't fall under the rule's ban on speculative investments. The decision could force some banks to divest their CLOs, which are complex securities that bundle together corporate loans as well as bonds... Show More Summary
``The big trading banks traditionally have occupied the short side of the paper gold market. Some feel those positions will be handed off to the hedge fund business so things won't change much. On the other hand, hedge funds are not considered too big to fail, thus their bets could be placed more evenly on either side of the market.''
After years of planning and discussion, many of the financial regulations that resulted from the 2008 financial crisis -- specifically, FATCA and elements of Dodd-Frank, such as the Volcker Rule -- are finally coming into effect. Here...Show More Summary
The Volcker rule is projected to cost major U.S. banks up to $4.3 billion, due largely to the lost value of investments in certain debt instruments, a federal bank regulator said Thursday.
The Volcker Rule is designed to address conflicts of interest in proprietary trading, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Proprietary trading, where banks trade for their own account and not on behalf of any client...
The simplest and cleanest way that regulators could deal with the controversial inclusion of CLOs is simply to not recognize them as covered funds,.....
The challenge, it seems, would most often arise when there were questionable trades that involved several legal entities within one institution, bringing into play the regulatory remit of more than one agency.
The banking industry’s push to exempt a group of debt investments from the Volcker Rule won a nod of support this week from senior Democrats in the House.
The American Bankers Association announced on Wednesday that it was dropping its lawsuit to block parts of the Volcker Rule from going into effect after regulators modified what the group found most objectionable.
By James Kwak The Wall Street Journal reports that the federal financial regulators may yet again carve a loophole in the Volcker Rule. This time, the issue is whether banks subject to the rule’s proprietary trading prohibitions can hold collateralized … Continue reading ?
Moments ago, the Senate Banking Committee started a hearing on the topic of "Financial Stability And Data Security." We assume the topic discussed will be financial stability, the highly diluted final version of the Volcker Rule, Dodd Drank, the London Whale, and other things legislators have no understanding of. Show More Summary
When TRuPs (and their CDOs) proved in the financial crisis to be less resistant to loss than previously thought, they fell out of regulatory favor.