Wall Street’s biggest banks will face curbs on some trading and chief executive officers won’t be personally responsible for ensuring compliance in the final version of the Volcker rule, U.S. regulators’ landmark attempt to rein in the financial industry, Bloomberg News reported today. The Federal Reserve, the Federal Deposit Insurance Corp. and three other agencies are set to sign off on the proprietary trading ban, which has been contested by New York-based banks JPMorgan Chase & Co., Goldman Sachs Group Inc. and their industry allies for more than three years. Wall Street’s lobbying paid off in part. Regulators granted a broader exemption from the ban for banks’ market-making desks, on the condition that traders aren’t paid in a way that rewards proprietary trading, according to a draft of the final rule. The final version also exempts securities tied to foreign sovereign debt from the ban. At the same time, regulators gave banks less leeway for bets considered hedges for other risks.
