| Was Congress right to soften the Volcker rule? |
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Nicholas Pettifer Americas editor
When the Volcker rule to ban banks from proprietary trading and investing in hedge funds was first announced in January, many were concerned. Lawyers told IFLR that hedge funds were being unfairly targeted. They were not to blame for the financial crisis and banks were worried that they would have to carve out profitable areas of business.
At the end of last month, however, the Volcker rule was softened, to the relief of 63% of those polled for The Big Question. The final version of the bill to come out of the congressional conference process allows a bank to invest up to 3% of its own capital into proprietary trading or hedge funds that they manage for clients.
"This is great news for the vast majority of banks," says a private equity partner in New York. "It is...