Receiving Wide Coverage ...
Final Lap for Volcker Rule? A final version of the Volcker Rule, arguably the most controversial element of the Dodd-Frank Act, is expected to be approved by the five U.S. federal banking regulatory agencies today. The law is meant to prevent banks from engaging in risky trading for their own accounts, considered a factor in the downfall of some Wall Street firms in 2008. (A more modern example is JPMorgan Chase's London Whale incident, which resulted in a $6 billion loss for the bank.) Some say the Volcker rule, which was first announced in January 2010, is too tough, others that it's not tough enough.
"Wall Street is expected to
Banks may be able to evade the rule by disguising proprietary trading as "market making" trades on customers' behalf, the Times suggests.
But the Wall Street Journal
And bank executives "will be required to 'attest in writing that the banking entity has in place processes to establish, maintain, enforce, review, test and modify the compliance program' set up for the Volcker rule."
The Journal also offers a
The Financial Times focused on the reaction of long-haired CFTC regulator Bart Chilton, whom it describes as "
Chilton says the finalized rule closes loopholes and ends speculative trading by requiring banks' hedges to be "designed to mitigate and reduce actual risk, and not just by an accidental or collateral effect of the trade."
"You can't just say, 'Ah, oh, that? Hmm, it was a hedge'," said Mr Chilton, who will be leaving the CFTC in a few weeks. "Nope, we aren't going to let ya play that game. The position needs to be correlated with the risk."
If the rule does pass, it won't go into effect until July 2015.
In Dealbook, Wharton professor Daniel Zaring says that having a hodgepodge of five regulatory agencies enforce the Volcker Rules means
Financial Times
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Outstanding mortgage debt
New York Times
The anonymity of Bitcoin and the fact that it operates outside the current banking system make it difficult to trace transactions, he says. (This is one reason why
But wire fraud laws might apply to Bitcoin fraud, he writes. And recent guidance from the Financial Crimes Enforcement Network, a bureau of the Treasury Department, requires administrators and exchangers of virtual currencies to report transactions, including the identity of Bitcoin traders. Bitcoin miners could then be considered money transmitters subject to money laundering laws. Investments in Bitcoin could fall under the SEC's jurisdiction. And packaged Bitcoins could qualify as commodities subject to regulation by the CFTC. Federal tax laws could be applied to those paid in virtual currency or those who reap capital gains from selling Bitcoins.