Further Weakening of Volcker Rule Proposed by Regulators

U.S. banking regulators have made new proposals that would allow for banks to take stakes in venture capital and loan funds which would further weaken the post crisis Volcker rule regulations; so long as banks were already allowed to own the assets already they would be permitted to make investments in funds that own bonds and loans; venture capital investments would no longer be covered by the rule; Securities and Exchange Commission chairman Jay Clayton said to the FT that enacting the amendments could “facilitate capital formation, improve competition and market efficiency along a number of dimensions, and do so without increasing risks to investors.”; consumer advocate groups were against the move saying that this will allow banks to go back to the risky behavior that help enable the financial crisis. Financial Times

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