WASHINGTON, Feb 2 (Reuters) – Commercial banks should not be allowed to establish or maintain a separate trading desk, capitalized with their own resources and unrelated to customer business, a top U.S. Treasury official said on Tuesday.
At a hearing to examine a White House proposal to restrict banks’ proprietary trading, Treasury Deputy Secretary Neal Wolin said banks should not be allowed to use such trading desks to speculate on the price of oil, gas or equity securities.
In January, the Obama administration proposed limiting commercial banks’ ability to engage in proprietary trading or do business with a hedge fund or private equity fund.
Wolin said those restrictions should apply to all banks, including the U.S. operations of foreign banking firms that have a U.S. branch and fall under U.S. federal laws.
Foreign operations of U.S.-based banking firms would also be subject to the trading and speculative limits, Wolin said.