For those following the ongoing battle over what shape banking reform may take, today’s New York Post featured an up-to-date roundup of who wants what. As I discussed yesterday, the Volcker Rule, which would remove the banks’ ability to engage in prop trading and hedge fund-like activities, has been gaining increasing support. Josh Kosman and Mark DeCambre report that this may all be irrelevant as the President himself is already leaning toward a watered-down compromise…
However, in the month since the announcement stunned Wall Street, sources said Volcker’s ideas have been “marginalized” and are not expected to figure prominently in whatever the Senate formulates in the coming days.
“My understanding is the White House really does believe in it, but Treasury and the Hill do not, so it’s not going very far,” said one person close to the Treasury Department.
Added another source, “the White House is looking to save face” by backing a proposal with fewer restrictions.
According to the article, the compromise may come in the form of allowing prop trading at banks but mandating higher capital reserves to make it “safer”.
So they’ll still be able to do 110 on a crowded freeway, but they may have to wear a seatbelt.
Change and Hope, y’all.