U.S. set to adopt Volcker rule to curb bank trading gambles

By using Douwe Miedema WASHINGTON (Reuters) – U.S. regulators are set on Tuesday to approve a rule to rein in hazardous trading by banks, a the most important a part of their efforts to reform Wall Boulevard and stop another pricey taxpayer bailout. The Volcker rule, named after former Federal Reserve Chairman Paul Volcker, who championed the reform, prohibits banks from having a bet on financial markets with their own cash, a convention known as proprietary buying and selling. The ultimate model of the crackdown is predicted to be more challenging than when it was proposed two years in the past, after JPMorgan Chase & Co's $6 billion loss in 2012 – nicknamed the London Whale after the financial institution's huge positions – highlighted the perils of speculative trading. "The problem is to prevent the impermissible actions, while promoting the underwriting, the market making, everything that everyone regards as necessary to financial markets," stated Robert Maxant, a companion at Deloitte & Touche.