U.S. Banks Push for Volcker Rule Changes

According to a Reuters article, big banks are working to persuade Congress to loosen or eliminate certain portions of the Dodd-Frank Act's Volcker rule. Banks argue that the rule is reducing market liquidity, which damages businesses, investors and the economy. Volcker needs to change "so businesses can get started, grow, and create well-paying jobs," as Tom Quaadman, Executive Vice President at the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, said in an interview.

Big banks have been making such arguments for years but now see potential opportunities under President-Elect Donald Trump's administration and the incoming Republican-led Congress. In particular, according to industry lobbying sources, banks want to reverse language in the final Volcker rule that assumes all trades are proprietary unless banks can prove otherwise, in addition to clarifying language that instructs them to hold only enough securities to satisfy "reasonably expected near-term demand" from customers.

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