Key Development: Sen. Jeff Merkley (D-Ore.) asks federal financial regulators whether large losses by Credit Suisse Group AG in distressed holdings might show whether the firm violated the Volcker Rule.<\/p>\n
A prominent Senate Banking Committee member is asking federal financial regulators whether large losses by Credit Suisse Group AG in distressed holdings might show whether the firm violated a federal ban on proprietary trading.<\/p>\n
Earlier this year, the Zurich-based bank reportedly began selling distressed debt that led to losses at the end of 2015, mostly in small chunks. Credit Suisse wrote down more than $600 million in distressed credit and securitizations.<\/p>\n
“Credit Suisse’s failures to effectively oversee its risky trading operation bring to the surface an on-going concern I have” about whether the Volcker Rule is being properly implemented, Sen. Jeff Merkley (D-Ore.) said in a May 5 letter to the heads of five financial regulators, including the Securities and Exchange Commission and Federal Reserve Board of Governors. Merkley said the losses could reflect that high-risk proprietary trading still persists at the bank and in the industry.<\/p>\n
The Volcker Rule, found in Section 619 of the Dodd-Frank Act, bans proprietary trading by banks and prevents them from owning or investing in hedge funds and private equity funds.<\/p>\n
“How can the American public have confidence that banking organizations are complying with the Volcker Rule when this type of massive loss can occur?” Merkley wrote.<\/p>\n
Merkley asked for more details on Credit Suisse’s trading positions that led to the losses, and whether those positions or bankers’ pay potential violates the Volcker Rule.<\/p>\n
The letter was also sent to the leaders of the Office of the Comptroller of the Currency, Commodity Futures Trading Commission and Federal Deposit Insurance Corporation.<\/p>","protected":false},"excerpt":{"rendered":"
Key Development: Sen. Jeff Merkley (D-Ore.) asks federal financial regulators whether large losses by Credit Suisse Group AG in distressed holdings might show whether the firm violated the Volcker Rule. A prominent Senate Banking Committee member is asking federal financial regulators whether large losses by Credit Suisse Group AG in distressed holdings might show whether […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[44,47],"class_list":["post-5522","post","type-post","status-publish","format-standard","hentry","category-in-the-news","tag-jobs-and-the-economy","tag-protecting-consumers-taxpayers-and-the-economy"],"acf":[],"yoast_head":"\n