Paul Volcker is barely cold in his grave, and still the regulators—including his own former agency—cannot contain their enthusiasm for dancing all over it and trampling the floral arrangements Ray Dalio so carefully laid upon it.
U.S. regulators, including the Federal Reserve and the Office of the Comptroller of the Currency, on Thursday are set to propose removing the 3% limit on the stake banks can own in venture funds they offer to their clients…. The Volcker rule bars financial firms from making speculative trades with their own funds through a complicated set of restrictions.
Of course: There’s nothing at all speculative about venture capital. But wait: Who is that we see joining in the desecration but Volcker’s old partner in reining in banks, Chris Dodd, who perhaps not incidentally has hung his shingle to represent the very same banks. For shame.
The move to exclude venture funds from the ownership cap was a priority of the venture-capital industry as well as some large banks, including Goldman Sachs Group Inc., according to people familiar with lobbying over the issue…. Supporters of the change point to statements from former Sen. Christopher Dodd (D., Conn.), a namesake of the 2010 law, who has said venture-capital funds weren’t intended to be caught up in the Volcker restrictions.