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'Tough' Volcker Rule Coming Next Week

U.S. Treasury Secretary Jack Lew is pictured speaking to reporters, July 21, 2013. (Kostas Tsironis/AP)
U.S. Treasury Secretary Jack Lew is pictured speaking to reporters, July 21, 2013. (Kostas Tsironis/AP)

U.S. Treasury Secretary Jack Lew says a “tough” new Volcker Rule is coming next week, as regulators continue the work of regulating financial markets. The new rule would restrict what Lew called “risky bets” by banks.

Financial reform was the topic of Lew’s speech this morning at the Pew Charitable Trusts. He acknowledged that completing the rules that are part of the landmark 2010 Frank Dodd law “have taken longer than we hoped,” but said the U.S. economy is safer today because of the regulations passed after the financial crisis.

Critics say it’s not just that key parts of Dodd Frank have yet to be written, it’s that regulations so far have failed to address the “too-big-to-fail” problem. Lew argued that new regulations have increased the cost of being big, which makes makes it less attractive for banks to grow.

Looking ahead beyond the Volcker Rule, Lew said the Obama administration is calling on the world’s big economies to push ahead with financial regulations to end loopholes that could be exploited by markets.

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