After three years of court-wrangling and trade-offs, the Volker Rule will be finalized today by the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC) and three other agencies to restrict risky proprietary trading, while protecting economically essential activities such as market-making. Thus, giant banks like JPMorgan Chase & Co. (JPM), Goldman Sachs (GS) and the others will be prohibited from making trades that could result in catastrophic losses that would require a government bail-out. However, in a major concession for staffers at the market-making desks of banks, the people who set prices couldn’t be found liable, going forward, for price fixing. As investors, you might be wise to see just how far afield some bank’s market makers will go you plunk down funds in the financial sector.
Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager. As well as a book author and regular contributor to numerous investment websites, Jim is the editor of:
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Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services: