John Dugan, comptroller of the currency, told reporters: “It’s one thing to talk about pure proprietary trading as a business where the bank is in the business of taking bets on particular markets for its own account. And I understand the concern with that going forward, although this was not a big source of the problems that led to the crisis.”
President Barack Obama late last month proposed new limits on big banks’ risk-taking, including curbs on commercial banks’ ability to engage in trading for their own profit instead of for clients.
The proposals would also restrict the banks’ ability to invest in, sponsor or own a hedge fund or private equity fund.
Details of the so-called “Volcker rule” have been scant, and it is unclear if lawmakers will include a version of it in Congress’ sweeping regulatory reform package. Dugan said the definition of proprietary trading will be critical.