STOCK MARKET WATCH - Wednesday, 15 February 2012

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50. Regulators weigh massive public input on 'Volcker rule'

http://www.latimes.com/business/la-fi-volcker-rule-20120215,0,3620518.story

Regulators are confronting some 15,000 public letters attempting to influence the final shape of one of the most controversial elements of the 2010 financial reform bill.

Five regulatory agencies have until July to complete a new rule that would ban proprietary trading at Wall Street firms, a move that some believe would make the U.S. financial system safer. The rule named after former Federal Reserve Chairman Paul Volcker would stop banks from using their own money to trade for profit rather than fulfilling a client's order.

Banks, trading firms and critics of the financial industry have inundated regulators with letters and meetings before this week's deadline for public comment on the so-called Volcker rule. Trading operations have been among the most profitable divisions of the nation's largest banks in recent years, and the financial industry has spared no expense in fighting new restrictions.

But critics of the banks say that risky speculative trading was one of the factors that fueled the mortgage bubble and needs to be curtailed. Financial firms have also faced anger for betting against their own clients in pursuit of profit.