A key post-crisis banking rule faces big changes, thanks to Congress and Trump
by Joseph Lawler
A major post-financial crisis rule meant to curb excessive risk-taking by banks faces major changes in the months ahead. Legislators and federal regulators from both parties favor revising the Volcker Rule to lessen the regulatory burdens on banks and free up lending. But Wall Street critics fear that even modest new accommodations for banks will set a precedent that allows big banks to return to big speculative bets, subsidized by taxpayers. …The practice of presuming that every short-term trade is pure speculation is “essentially a guilty-until-proven-innocent principle,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a firm that provides analysis and consulting to financial firms. It “quashes a significant amount of sensible and safe activity,” she added, because banks have to prove that short-term trades are necessary to provide customers with a service.