Wall Street Firms Find Volcker Loophole: Report

[deminks]

Source: Reuters

NEW YORK (Reuters) - U.S. banks have found a way to continue betting their own money on some investments, despite a new law's restrictions on proprietary trading, the Financial Times reported on Thursday, citing Wall Street executives.

The "Volcker rule" provision of the U.S. Dodd-Frank financial reform limits the extent to which banks can bet with their own capital, banning them from short-term trading of securities for their own accounts. Firms including Goldman Sachs Group Inc and Morgan Stanley are closing or slimming down some of their units in order to comply with the law.

But the Volcker rule does not apply to banks' "principal investments," or longer-term direct purchases of securities, companies and property assets, the Financial Times said. Such deals drove big profits for banks before the financial crisis, but turned into a main source of losses for Wall Street firms like the now-defunct Lehman Brothers Holdings Inc, the paper said.

A senior Wall Street banker told the Financial Times that principal investments remain attractive despite increasing regulations.

Read more: http://abcnews.go.com/Business/wireStory?id=12121496

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Gentlemen, place your bets.

[tomm2thumbs]

1. does anyone doubt banksters would sell their own mothers for 5 bucks if they could?

is it much of a leap, then, to sell your own country for 10 ?

[Citizen Worker]

2. They already have and we, the taxpayers, picked up the tab. Now, we all need to sit down and shut u...

and patiently await the bailout of Bank of America because it's coming.

[Angry Dragon]

4. If Obama would sign a bill bailing out any more banks

Obama might as well just resign and let Biden have the job
Because he would be finished as a President. The people would not stand with him.

[xchrom]

3. recommend

[formercia]

5. Am I not surprised?

When lobbyists, former lobbyists and lobbyists to be get to write the laws, you can be assured the laws they write aren't worth the paper they're printed on.

The name Dodd comes to mind for some reason.......

Big-time Attorneys know where the get out of jail free loopholes are.

Again: Laws are for little people.

[Roy Rolling]

6. I am surprised...

I am surprised that, while using taxpayer funds to continue trading in their own accounts, they have not found a tax loophole, too, to make the profits tax-free. The evil overlords are slipping . . .

[JJW]

7. Fitchforks

The only reasonable solution at this late stage in US deterioration, is pitchforks, tar feathers, and a pine rails. A society that is based on how much dollars you can steal is evil.

Anyone ever wonder why other people from other countries fight our troops. They don't want to be like us. They don't want to be discarded, left to die, because they didn't swindle enough money from others.