FINANCIAL TIMES: Wall Street groups will continue to invest billions of dollars in property and companies in spite of new rules aimed at curbing banks’ bets with their capital, executives say…
The rule, named after Paul Volcker, former Federal Reserve chairman, bans banks from short-term trading of securities for their own account and limits investments in private equity groups and hedge funds. Legislators were seeking to reduce banks’ risk-taking and focus their efforts on helping customers rather than themselves.
However, the Volcker restrictions do not apply to “principal investments” – banks’ direct purchases of securities, companies and property assets – because they are regarded as longer-term commitments and carry higher capital charges… (more)
