U.S. banks pushed regulators to widen proposed restrictions on trading and hedge-fund ownership by foreign firms, then encouraged governments around the world to complain about the rule's reach.
The two-pronged lobbying strategy resulted in foreign officials joining U.S. lenders to push back against the Volcker rule, named after former Federal Reserve Chairman Paul A. Volcker and incorporated in the 2010 Dodd-Frank Act.
“The criticism of foreign governments on behalf of their banks is helping U.S. banks fight the rule,” said Anat Admati, a professor of finance at Stanford University. “It also muddies the water, shifting the debate away from the main issue, which is reducing the risks banks impose on the economy.”
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