Mnuchin dims banks' hopes he will allow a proprietary-trading revival

By Elizabeth Dexheimer
Bloomberg News
Saturday, January 28, 2017

Steven Mnuchin made clear he doesn't want Wall Street banks getting back into the business of making risky market bets with their own capital, after Senate Democrats pushed him to clarify his responses to questions they asked during his confirmation process to be Treasury secretary.

In written remarks to lawmakers, Mnuchin said that even banking units that lack a government backstop should be restricted from making speculative trades. At issue is the Volcker Rule, a contentious provision in the 2010 Dodd-Frank Act that sought to prevent lenders from putting federally-insured deposits at risk through wagers on stocks, bonds and other assets.

"A legal distinction between the insured and non-insured entity is an important factor in eliminating risky activities within the institution that has" insured deposits, Mnuchin said in an amended response to a senator's question about Volcker. "I do not believe that the uninsured entity should be able to perform proprietary trading." ...

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https://www.bloomberg.com/politics/articles/2017-01-28/mnuchin-dims-bank...