The White House has some quick explaining to do if it wants to convince lawmakers that a proposed limit on risk-taking by big banks needs to be included in financial reforms that are already more than a year in the making.
The 11th-hour rule, proposed late last month by President Barack Obama and inspired by White House economics adviser Paul Volcker, could be left behind as the U.S. Congress moves toward a bipartisan deal on tighter financial regulation, said some analysts and congressional aides on Wednesday.
After a less-than-illuminating Senate Banking Committee hearing on Tuesday, many predict the Volcker Rule is doomed. Although some analysts have reported that the Volcker rule could be watered down and included in a final legislative package expected to emerge from the banking committee as early as mid-February.
“If you want to get the broader bill done, you need to water down the Volcker language and that’s how we expect it to end up,” said Jaret Seiberg, an analyst with Concept Capital. President Obama stunned financial markets in January with the proposal to restrict proprietary trading by banks, get them out of the hedge fund business, and limit their future growth :: Read the full article »»»»