Wall Street banks will finally get clarity about a controversial ban on betting with their own money, as the U.S. Commodity Futures Trading Commission announced a meeting for next week to vote on the so-called Volcker rule.
The swaps regulator—one of five different regulatory agencies that each need to approve the rule—said on Tuesday it planned to hold a public meeting on Dec. 10, in line with what the CFTC had indicated earlier.
Treasury Secretary Jack Lew is pushing for the rule to be finished this year. But the finance watch-dogs have been struggling to hammer out a compromise on the complexities of the text, which has now mushroomed to a 1,000 pages.
The rule bans proprietary trading, a common practice in the heady days before the 2007-09 financial crisis, when banks played financial markets for profit. It also limits banks' holdings in hedge funds and private equity funds.
The Volcker rule—named after former Federal Reserve Chairman Paul Volcker—is the last major piece of unfinished business in the 2010 Dodd-Frank law, which aims to prevent a repeat of the 2008 taxpayer bail-out of Wall Street.
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Regulators had a hard time distinguishing proprietary trading from healthy activities such as market making, in which banks hold risky securities to ease markets for client orders and not for their own accounts.
Banks have long been complaining that the rule would eat into profits. But JP Morgan's $6 billion so-called London Whale loss in 2012—in a poorly known part of its business—did away with any notion the rule would be watered down.