First Details on Volcker Rule to Reign in Reckless Banks | Reuters

Reuters posted a  summary of the Obama administration's draft language for the so-called "Volcker Rule". This represents a remarkable about-face for Obama44, basically repudiating it's early position and years of work by its top financial players to de-regulate banks. Skepticism exists about whether this proposal is for only for show, since Obama early opposed these changes and then proposed them only after the Senate bills were well into development. We'll see. 

 Excerpts: 

* PROPRIETARY TRADING BAN

Banking firms would be banned from "purchasing or selling, or otherwise acquiring and disposing of, stocks, bonds, options, commodities, derivatives, or other financial instruments for the institution's or company's own trading book, and not on behalf of a customer, as part of market making activities, or otherwise in connection with or in facilitation of a customer relationship.

* HEDGE FUND, PRIVATE EQUITY FUND RESTRICTIONS

Banking firms would be banned from investing in or sponsoring hedge funds, private equity funds, or other similar funds that are exempt from federal registration.

The prohibition on sponsoring these private funds would include acting as a managing member or general partner of a fund, controlling the management of a fund, or sharing the firm's name with a fund.

* PRIVATE FUND LIMITS

Banking firms would continue to be able to serve as investment adviser to private funds, but would be prohibited from lending, providing prime brokerage services, or engaging in any transactions that provide support to a private fund advised by the banking firm.

*CAPITAL REQUIREMENTS

Non-bank firms would be allowed to continue to engage in proprietary trading and hedge fund and private equity activities, but would be subjected to tough consolidated supervision, more stringent capital and liquidity requirements, and be required to provide more information to the market about their risks.

Any firm that is identified for heightened supervision would be subject to additional capital and quantitative limits on these activities.

MARKET SHARE CAP

Financial firms would not be allowed to grow by acquisition above 10 percent of the liabilities of the financial system.

via www.reuters.com