Much ado about trading

摘要

Five years is the length of a modern British Parliament and one of Stalin's economic plans. Apparently, it is also the time needed to bring in a new American financial regulation. When the Dodd-Frank act was passed in 2010, the so-called Volcker rule was seen as one of its key provisions. But the rule only formally took effect on July 21st this year. The pertinent clause of Dodd-Frank amounts to all of 165 words (with the key points covered in 40). Banks are banned from two activities: proprietary trading and ties (through investment and relationships) to hedge and private-equity funds. Putting that into practice involved a collaboration of five regulatory agencies: the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (occ). This group produced an 891-page preamble leading to a 71-page rule, all of it written in dense bureaucratese.