Wall Street dealers added $1.8 billion of speculative-grade U.S. home-loan securities to their inventories yesterday as the Netherlands sold bonds to five banks led by Bank of America Corp. and Goldman Sachs Group Inc., Bloomberg News reported yesterday. Trading data that includes a $5.1 billion auction by the Dutch government shows that customers sold $5.5 billion of the debt to dealers, which in turn placed $3.7 billion with customers, according to Trace, the transaction reporting system of the Financial Industry Regulatory Authority. Bank of America won $1.9 billion in the Dutch sale, with Goldman Sachs getting $1.3 billion, according to a government statement. The auction of mortgage securities acquired in the Dutch rescue of ING Groep NV during the financial crisis came a day after banks avoided their worst fears of the Volcker rule, with regulators approving a final version of the speculative-trading ban crafted to leave intact market-making operations that can also create losses for dealers. Some firms may seek to use the business or hedging permitted under the regulation to disguise trading not meant to help clients or reduce risks, according to Commodity Futures Trading Commissioner Bart Chilton.
