THE BURNED OVER DISTRICT

Unless you happen to be one of the Big Banks who love to make huge, wild bets in an attempt to realize profits they can't generate on their own thanks to laregely incompetent management. In an effort to get bigger piles of money to gamble with, they are getting the Volker Rule watered down. It restricted the Big Banks to gambling with non-depositor funds. Water down the rule and they will be able to use any and all funds you may have on deposit as well when they make their big bets.

Regulators including the Federal Reserve will propose loosening the Volcker Rule, which was put in place to prevent banks from making risky bets with depositors’ money. The rule, which took five regulatory agencies more than three years to write, has been criticized by Wall Street as onerous and harmful to the financial markets.

Regulators view the rule as too complicated to enforce, with both current Fed Chairman Jerome H. Powell and his predecessor, Janet L. Yellen, calling for simplification of the rule.

The Fed will meet Wednesday afternoon to propose a series of changes aimed at making the rule simpler and easier for banks to comply with, according to the people familiar with the proposal. It is expected to keep the core of the Volcker Rule intact and will continue to prevent banks from trading with depositors’ money.

But the people said that some small word changes are likely to usher in big changes on Wall Street.

Perhaps the biggest change would allow banks to more freely engage in hedging, in which they execute trades in an effort to counteract risk in other parts of their businesses. Such trading had been curtailed by the Volcker Rule, which required banks to show regulators specifically how each trade acts as a hedge against specific risks.

Regulators are expected to propose relieving banks of that responsibility. That would put the onus on regulators to prove that a trade was not done to hedge an actual risk.

The change would come by omitting a single word, “demonstrably,” from a section of the Volcker Rule. That provision states that banks can count their complex trades as hedges as long as they “may reasonably be expected to demonstrably reduce or otherwise significantly mitigate the specific, identifiable risk(s).” Removing the word “demonstrably” relieves banks of the responsibility for showing regulators specifically how their trades act as hedges.

Regulators are also expected to give foreign banks more freedom to engage in riskier trading activity overseas. The proposal is expected to require foreign banks to ensure that trading done within the United States is compliant with the Volcker Rule.

Seems simple, if you are going to make a move with a large sum of money, you can tell anyone who asks why you are doing so. In the current state of Big Banks, this is too great a burden. No doubt about it, the Banksters fell they did not steal enough of the wealth of the country in the last collapse, so they are going for another go-round. BOHICA.