No surprises in that statement, the show must go on.
Financial markets are incredibly complicated. While manageable by a central authority to some degree, the best-laid plans of mice and men often go awry. The regulatory bodies of various countries have drafted tens of thousands of pages of financial regulations to minimize fraud and penalize immoral behavior in financial markets. Unfortunately, the complicated and occasionally conflicting nature of these various regulations often gives larger institutions with deep pockets access to loopholes. The majority of smaller institutions and individuals lack the financial means to accurately interpret these loopholes, leading to asymmetrical outcomes.
Recently, section 619 of the Dodd-Frank Act, also known as the Volcker Rule, was augmented for clarification purposes. Exacted in the wake of the 2008 Great Financial Crisis (GFC), the Dodd-Frank Act seeks to regulate financial markets more efficiently to prevent another cascading collapse. While the Volcker Rule still disallows proprietary trading, it now allows for banks to fund credit-worthy investment funds. [click to continue reading...]
Originally published at https://www.datadriveninvestor.com on June 30, 2020.