Over five years of gestation, one and a half more than expected, but it has finally arrived. It's called the "Volcker rule" and its purpose is to prevent financial disasters like the collapse of Lehman Brothers from happening again. On December 10, the five US regulators - CFTC, Fed, Sec, Occ and Fdic - gave the green light to the measure. The text is almost a thousand pages long and is part of the Dodd-Frank Act, the maxi-reform of finance passed by the Obama administration in 2010 and still far from complete implementation (only 42% of the 398 laws have been completed).
The heart of the "Volcker rule" is the prohibition of "proprietary trading": the big banks will no longer be allowed to speculate with proprietary portfolios. This type of investment was often used for very high-risk financial bets, which were then (paradoxically) disguised as hedging, or risk reduction strategies. From 2015 July XNUMX - when the "Volcker rule" will come into force - institutions will be able to operate on the financial markets only in the name and on behalf of their customers.
Not only that: the new legislation also imposes limits on investments in hedge funds and private equity funds (to prevent proprietary trading from being transferred there), as well as the obligation for managing directors to certify compliance with the rules every year by of the banks. For their part, the authorities will have the power to evaluate the activity of traders with checks that could also be daily.
“The financial system and Americans are safer – said President Barack Obama -. The law opens a new era of accountability for managing directors”.
In recent months, the opposition of lobbies and Republicans had led to fears that the "Volcker rule" was going towards a softening. The final version, on the other hand, is even heavier than expected, because it also bans "portfolio hedging", i.e. aggressive strategies to protect customers or the banks themselves from possible shocks in a vast portfolio of assets. This is a measure inspired by the "Whale of London" scandal, which cost JP Morgan 6 billion in losses and another 13 to settle the various legal disputes.
All of these rules will only affect large institutions, while those with assets under $10 billion will be excluded. Initially the entry into force was scheduled for July 2014, XNUMX, but then the Fed decided to postpone the deadline to give the banks time to adapt to the new arrivals. The giants of Wall Street, therefore, still have a year and a half to try to circumvent the rules. And an avalanche of appeals to the Court is already ready.
