FILE - In this March 18, 1980, file photo, Federal Reserve Board Chairman Paul Volcker listens to a question as he appears before the Senate Banking Committee in Washington, D.C. The Federal Reserve and the Federal Deposit Insurance Corp. each unanimously voted to adopt the so-called Volcker Rule, taking a major step toward preventing extreme risk-taking on Wall Street that helped trigger the 2008 financial crisis. The rule which states that U.S. banks will be barred in most cases from trading for their own profit under a federal rule is named after Paul Volcker, a former Fed chairman who was an adviser to President Barack Obama during the financial crisis. (AP Photo/Chick Harrity, File)
December 10, 2013 - 6:35 AM
WASHINGTON - U.S. banks will be barred in most cases from trading for their own profit under a federal rule set to be approved Tuesday.
Five U.S. regulatory agencies are voting on the so-called Volcker Rule, a major step toward preventing extreme risk-taking on Wall Street that helped trigger the 2008 financial crisis.
Congress instructed regulators to draft the rule under the 2010 financial overhaul law.
The rule seeks to ban banks from proprietary trading. It's a practice that has been lucrative for banks. In addition to banning trades for their own profit, the rule limits banks' investments in hedge funds.
There is an exemption for proprietary trades when they are to facilitate buying and selling investment for customers.
The largest U.S. banks will be required to comply by July 2015.
News from © The Associated Press, 2013