The Volcker Rule Gets a Little Easier

Yesterday the Federal Reserve issued some fairly small proposed revisions to the Volcker Rule, which I guess we have to talk about. Here is an overview from Bloomberg’s Yalman Onaran, with the title “Why Wall Street Traders Aren’t Rejoicing (Yet) Over Volcker Rule.” The revisions tinker with the Volcker Rule’s requirements—removing a presumption that securities held for less than 60 days are held for “proprietary trading,” making it easier for banks to demonstrate that their market-making desks hold only enough inventory to meet “reasonaby expected near-term demand” from customers, etc.—to make compliance simpler, but don’t really change the basic structure of its prohibition on proprietary trading at banks. The standard criticism of easing the Volcker Rule is that it will allow banks to take more risks.