Bank stocks surged following Donald Trump’s election victory amid expectations of reduced regulation. Now it looks like the president is ready to follow through.
Backed by the Federal Reserve and assorted regulatory agencies, the Trump administration is planning to propose an overhaul to the so-called Volcker Rule, which was intended to clamp down on the excessive risk-taking by banks that many blame for the financial crisis.
Originally part of the 2010 Dodd-Frank Act, and named after former Fed Chairman Paul Volcker, the rule has long held a provision stating that positions held by banks for less than 60 days are considered speculative, and therefore not allowed.
Trump is instead proposing that banks be the ones to decide whether they’re complying, essentially making regulators responsible for challenging them, according to a Bloomberg report.