The Star – One particularly contentious section of the new U.S. regulations is the so called “Volcker Rule,” named after the former Federal Reserve chairman, Paul Volcker. The U.S. legislation, now before Congress, would prevent banks from dealing on their own account in securities, with some exceptions. The Volcker Rule in the bill before Congress states that “the term ‘proprietary trading’ means the trading of stocks, bonds, options, commodities, derivatives or other financial instruments with the company’s own money and for the company’s own account.”
The legislation would also restrict proprietary trading by non-bank financial institutions by having the Federal Reserve set “capital and quantitative limits” on such trading. But the U.S. bill also includes a large number of exceptions for banks and those exceptions would allow much of the present proprietary trading to continue.
