Fed gives banks 2 more years on risky securities

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The Federal Reserve is giving US banks two more years to ensure their holdings of certain complex and risky securities don’t put them afoul of the new Volcker Rule.

The Fed’s move, announced Monday, didn’t give banks an outright exemption from the Volcker Rule’s ban on high-risk investments. Wall Street banks had sought an exemption, and the leading Wall Street lobbying group expressed disappointment with the Fed’s move.

The Volcker Rule, adopted in December, is intended to limit trading bets that could implode at taxpayers’ expense. That kind of risk-taking helped trigger the 2008 financial crisis. Congress mandated the Volcker Rule in its financial overhaul.

The Fed gave banks until July 2017.

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