MW: Fed moves closer to adopting Volcker Rule proposal
By Ronald D. Orol
WASHINGTON (MarketWatch) The Federal Reserve on Tuesday approved the introduction of a controversial Volcker Rule proposal, a measure that could force big banks to cling onto a wide variety of trades for at least two months. The 298-page measure, named after an idea suggested by former Federal Reserve Chairman Paul Volcker, is intended to limit big insured banks' speculative proprietary derivatives and stock investments. It also seeks to limit big bank investments in hedge- and private-equity funds in an effort to limit risks to the broader financial system. The Federal Deposit Insurance Corp. is scheduled to vote on introducing the proposal later Tuesday and the Securities and Exchange Commission is scheduled to vote on introducing the measure Wednesday. Major bank and securities regulators are required by the Dodd-Frank Act to put in place Volcker rule regulations.
