Wall Street Adapts to New Regulatory Regime

Banks are cutting ties with businesses that could attract extra regulatory scrutiny
Wall Street Adapts to New Regulatory Regime

Image Credits: ensh / Flickr

by Victoria McGrane And Julie Steinberg | The Wall Street Journal | July 21, 2014


Four years after the Dodd-Frank financial law became reality, Washington’s regulatory machine is altering Wall Street in fundamental ways.

Banks are selling off profitable business lines, pulling back from the short-term funding market, cutting ties with businesses that could attract extra regulatory scrutiny, and building up defenses to help weather future crises.

While profits are up as firms slash costs and reduce funds set aside to cover future losses, their traditional profit engine—trading—is showing signs of weakening as banks step away from some activity amid regulatory pressure.

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