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Mnuchin Said to Start Review That Could Ease Volcker Rule’s Bite 

May 12, 2017

Benjamin Bain, Bloomberg

The Trump administration is quietly helping Wall Street in its campaign to chip away at the toughest trading restriction imposed on banks after the financial crisis.

At a closed-door meeting in Washington on Monday, Treasury Secretary Steven Mnuchin directed five key agencies to re-examine what’s permitted under the Volcker Rule, said two people familiar with the matter. The provision, widely despised on Wall Street, bars banks from wagering on markets with their own capital. Mnuchin’s action could lead to changes that give banks more flexibility to trade without running afoul of the rule.

Volcker has been controversial since its inclusion in the 2010 Dodd-Frank Act. It was meant to prevent lenders with federally-backed deposit insurance from making big market bets that could lead to outsized losses. But critics say it has made banks too conservative, prompting a retrenchment from certain markets that has dried up liquidity.

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