Wall Street is moving closer to a Volcker Rule win

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Mnuchin blames high-frequency trading, Volcker Rule for market selloff

“Bulls & Bears” panel on how Treasury Secretary Steven Mnuchin blamed the recent market volatility on high-frequency trading and the Volcker Rule.

Wall Street is moving closer to scoring a major victory after regulators moved closer to scaling back the Volker Rule, a regulation born in the aftermath of the financial crisis of 2008.

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On Tuesday, Comptroller of the Currency Joseph Otting signed off on Volcker Rule reforms, setting the stage for the Federal Deposit Insurance Corporation’s vote later in the day. The reform is expected to pass through four more regulators in the days and weeks ahead.

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The Volker Rule is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, born under former President Barrack Obama in the wake of the 2008 financial crisis, and is designed to prevent banks that received federally insured deposits from proprietary trading, or making speculative short-term trades with their own capital.

“After extensive comment and feedback through the rulemaking process, I am pleased to approve changes to the “Volcker Rule” that simplify the rule in a common sense way that preserves the safety and soundness of the federal banking system and eliminates unintended negative consequences of the prior rule,” Otting said in a press release.

Details of the changes are not yet known.

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In March 2018, President Trump eased some of the restrictions from Dodd-Frank. He raised the threshold for a “too big to fail” bank from $50 billion of assets to $250 billion and eliminated the “Volker Rule” for banks with less than $10 billion of assets. The rollback also laxed the mortgage-lending rules for small banks.

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