Bank Stocks Surge As Regulators Ease Volcker Rule, Morgan Stanley Jumps Over 2%

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U.S. regulators are continuing their push to roll back restrictions instituted in the wake of the 2008 financial crisis.

Bank stocks surged after federal regulators on Thursday announced they plan to roll back post-financial crisis restrictions, including the Volcker Rule which prevent banks from making large investments into certain funds....

The reversal of the margin requirement for swaps trades could potentially free up an estimated $40 billion for Wall Street banks, BloombergShares of major banks soared on the news, leading the market to cut its losses from disappointing unemployment data and turn positive on Thursday morning. JPMorgan and Morgan Stanley saw their stocks rise more than 2%, while Citigroup and Bank of America are both up over 1.5%.

The Federal Deposit Insurance Corp. is set to join the OCC in approving the rule changes when it meets for a vote later on Thursday, but the Federal Reserve will still need to sign off on the move, according to Bloomberg.The Volcker Rule was originally established as part of the 2010 Dodd-Frank Act, with the aim offrom acting like hedge funds and taking irresponsible risks with their investments.

 

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