PLEDGE NOW
Here and Now with Robin Young and Jeremy Hobson
Public radio's live
midday news program
With sponsorship from
Mathworks - Accelerating the pace of engineering and science
Accelerating the pace
of engineering and science
Tuesday, December 10, 2013

US Ban On High-Risk Bank Trades Approved

U.S. banks will be barred in most cases from trading for their own profit under a federal rule approved Tuesday.

The Federal Reserve and the Federal Deposit Insurance Corp. each unanimously voted to adopt the so-called Volcker Rule, taking a major step toward preventing extreme risk-taking on Wall Street that helped trigger the 2008 financial crisis.

Three other regulators were expected to follow suit Tuesday.

Congress instructed regulators to draft the rule under the 2010 financial overhaul law.

The rule was agreed to after three years of drafts, debates and lobbying by Wall Street banks.

The final version is stricter than many had expected and is intended to prevent risky trading that required taxpayer-funded bailouts during the crisis. But the rule still provides some exemptions.

At its heart, the rule seeks to ban banks from almost all proprietary trading. The practice of trading for their own profit has been very lucrative for big banks like JPMorgan Chase, Bank of America and Citigroup. The rule also limits banks’ investments in hedge funds.

Still, the final version allows proprietary trading when it is done to facilitate buying and selling investment for customers. That is known as market-making.

Also exempted from the ban are cases when a bank underwrites a securities offering, and for trading in U.S. government, state and local bonds.

Guest

  • John Ydstie, correspondent and host for NPR who has covered the economy, Wall Street and the federal budget for NPR for two decades.

Please follow our community rules when engaging in comment discussion on this site.
Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

June 6 Comment

Introducing A New Here & Now Website

Coming June 9, 2016, Here & Now listeners and visitors will experience our stories and journalism online in a whole new way.

June 3 Comment

Teenagers Create Impromptu Exhibit At San Francisco Museum Of Modern Art

As the pair toured the museum, they wondered if they could do better. So 16-year-old Kevin Nguyen decided to get creative.

June 3 3 Comments

‘Silver Linings Playbook’ Author Explores Conformity, Mental Health In New Teen Novel

Matthew Quick published his fourth young adult book, "Every Exquisite Thing," this week.

June 2 13 Comments

Do Meal Kits Provide Great Taste Along With Convenience?

Resident chef Kathy Gunst tested a multitude of meal kits, and gives co-host Jeremy Hobson the inside scoop.