The FT carries a front page story (tip for viewing at end of post) on UK & Japan urging US to rewrite so-called ‘Volcker Rule’.
Citing risks that the trading restrictions it places on US banks operating overseas, will have detrimental impact on sovereign debt bond markets, at this stage of the global recovery.
Unintended consequences strikes again, around the difficulty for debt management offices (DMOs) to issue new sovereign debt.
The proposed rules mean that banks acting as primary dealers in that debt, will be restricted in their ability to ‘actively trade and warehouse’ positions. This will reduce liquidity and widen spreads in the secondary market. Resulting in reduced secondary market liquidity, higher yields and lower investor appetite – just what we ‘don’t need’
Previous coverage on this here
* = use this link, and click on resulting FT link
Filed under: Dodd Frank, Paul Blank, Regulation |
SingleDealerPlatforms.Org 
[…] Unfortunately, bank’s can now forget about any watering down of the Volcker Rules. […]