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.
“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,” tweetedSen. 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.