|Banks Push U.S. Fed to Delay Volcker Rule|
Banks are lobbying U.S. policy makers for a delay of up to seven years from a provision requiring them to sell investments in private-equity and venture-capital funds.
Bank officials, trade groups and lawmakers are quietly pressing the Federal Reserve for a multiyear delay of the rule that limits their investments in private-equity and venture-capital funds.
The "Volcker rule," part of the Dodd-Frank law, restricts banks' ownership stake in hedge funds and private equity funds.The rule prohibits banks from making speculative bets with their own money.A delay of the rule would affect large banks such as Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N).
The private equity business has become less appealing in general to banks because of the 2010 Dodd-Frank financial reform law. The Volcker rule, expected to be implemented in a few years, prohibits banks from investing in any fund they do not manage.Since the Volcker Rule was adopted, some banks have already made changes.The Federal Reserve could not be reached for comment outside of business hours.
JPMorgan spun off its last remaining private equity business, One Equity Partners, and sold almost half of its stake in the portfolio. Morgan Stanley in 2011 spun off most of its ownership in the $4.5 billion hedge fund FrontPoint Partners.
Representatives from Morgan Stanley, JPMorgan and Goldman Sachs also could not be reached outside of their business hours.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Aug.14, 2014