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A view of the Wall Street street sign with the New York Stock Exchange during the coronavirus pandemic on May 25, 2020 in New York City. (Photo: Noam Galai/Getty Images)

A view of the Wall Street street sign with the New York Stock Exchange during the coronavirus pandemic on May 25, 2020 in New York City. (Photo: Noam Galai/Getty Images)

'Big Banks Couldn't Be Happier': Stocks Surge as Trump Regulators Gut Restrictions on Risky Wall St Gambling

The rollback, noted the Wall Street Journal, hands "Wall Street one of its biggest wins of the Trump administration."

Jake Johnson

Bank stocks jumped and lobbyists rejoiced Thursday after U.S. regulators voted to gut the so-called Volcker Rule, a set of regulations imposed in the wake of the 2008 Wall Street collapse limiting the ability of financial institutions to engage in high-risk behavior that threatens the systemic health of the economy.

"This is no longer the Volcker Rule. In the hands of revolving door regulators, it turns banks into Trump casinos. Will the inevitable Trump casino bankruptcy be far away?"
—Bartlett Naylor, Public Citizen

"Instead of protecting our financial system in the middle of an unprecedented economic crisis, Trump-appointed regulators are plowing ahead with their dangerous deregulatory agenda," tweeted Sen. Elizabeth Warren (D-Mass.). "The big banks couldn't be happier about it."

CNBC reported that the shares of JPMorgan Chase, Goldman Sachs, Wells Fargo, and Morgan Stanley "were all trading more than 2% higher" after the changes to the Volcker Rule were announced by five regulatory agencies, including the Federal Reserve, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation.

The changes, set to take effect on Oct. 1, will make it easier for big banks to devote more of their resources to investments in venture capital funds and other vehicles—the kind risky of speculation that sent the entire U.S. financial system into a tailspin in 2008.

Regulators on Thursday also eliminated a requirement that banks set aside a certain amount of financial cushion to protect against trading losses. The rollback could free up tens of billions of dollars for Wall Street banks.

The Wall Street Journal reported that the combined deregulatory moves hand "Wall Street one of its biggest wins of the Trump administration."

Sen. Jeff Merkley (D-Ore.), one of the authors of the original Volcker Rule regulations, warned in a statement Thursday that the changes further destabilize the U.S. financial system at a time when the economy is already reeling from the coronavirus crisis.

"Deregulation of the banks is exactly the wrong way to boost our economy in this moment," said Merkley. "The last thing we need is to follow a public health crisis that has cratered our economy with another Wall Street-driven financial meltdown."

"It was only a decade ago when millions of Americans paid the price for Wall Street gambling in lost jobs, homes, and life savings," Merkley continued. "Reopening the Wall Street casino is the wrong path forward, one that puts all Americans' financial stability at greater risk."

Bartlett Naylor, financial policy advocate at consumer group Public Citizen, echoed Merkley's warning in a statement Thursday.

"This is no longer the Volcker Rule," said Naylor. "In the hands of revolving door regulators, it turns banks into Trump casinos. Will the inevitable Trump casino bankruptcy be far away?"


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'Infuriating': Biden Rebuked for Continued Opposition to Supreme Court Expansion

"What does Biden 'agree' with doing?" Mehdi Hasan asked. "What does the leader of this country want to do to stop the increasingly fascistic assault on our democratic institutions and basic rights?"

Kenny Stancil ·


'We Need Action': Biden, Democrats Urged to Protect Abortion Access in Post-Roe US

"The Supreme Court doesn't get the final say on abortion," Sens. Elizabeth Warren and Tina Smith wrote in a new op-ed.

Kenny Stancil ·


Motorist 'Tried to Murder' Abortion Rights Advocates at Iowa Protest, Witnesses Say

Although one witness said the driver went "out of his way" to hit pro-choice protestors in the street, Cedar Rapids police declined to make an arrest.

Kenny Stancil ·


'A Hate Crime': Oslo Pride Parade Canceled After Deadly Shooting at Gay Bar

A 42-year-old gunman has been charged with terrorism following what Norway's prime minister called a "terrible and deeply shocking attack on innocent people."

Kenny Stancil ·


'We WILL Fight Back': Outrage, Resolve as Protests Erupt Against SCOTUS Abortion Ruling

Demonstrators took to the streets Friday to defiantly denounce the Supreme Court's right-wing supermajority after it rescinded a constitutional right for the first time in U.S. history.

Brett Wilkins ·

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