(Reuters) U.S. banks will no longer be able to make big trading bets with their own money after regulators on Tuesday finalized the Volcker rule and shut down what was a hugely profitable business for Wall Street before the credit crisis.
After struggling for more than two years to craft the complex rule, five regulatory agencies signed off on the nearly 900-page reform that included new tough sections narrowing carve-outs for legitimate trades.
The rule is expected to eat into revenues at large investment banks such as Goldman Sachs and Morgan Stanley, even if many have already wound down some of their trading desks in anticipation of the rule's release, and may spark legal challenges.
Reform advocates cheered the changes in a sign they were tougher than the original proposal in November 2011, but much of the impact will be down to how regulators police banks to make sure they do not try to pass off speculative bets as
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