By Bradley Keoun
June 29 (Bloomberg) -- Goldman Sachs Group Inc. and Citigroup Inc. are among U.S. banks that may have as long as a dozen years to cut stakes in in-house hedge funds and private- equity units under a regulatory revamp agreed to last week.
Rules curbing banks’ investments in their own funds would take effect 15 months to two years after a law is passed, according to the bill. Banks would have two years to comply, with the potential for three one-year extensions after that. They could seek another five years for “illiquid” funds such as private equity or real estate, said Lawrence Kaplan, an attorney at Paul, Hastings, Janofsky & Walker LLP in Washington.
Giving banks until 2022 to fully implement the so-called Volcker rule is an accommodation for Wall Street in what President Barack Obama called the toughest financial reforms since the 1930s. The Glass-Steagall Act of 1933 forced commercial banks such as what is now JPMorgan Chase & Co. to shed their investment-banking units in less than two years.
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Grandpa: Chris Dodd voted in favor of repealing Glass-Steagall in 1999 and 11 years later, he deems himself the God of Financial Reform.
Chris Dodd
"No one will know until this is actually in place how it works. But we believe we've done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done.""Financial Reform Bill Would Stop Goldman-Style Shenanigans"
“This is a tremendous day,” said Dodd. “After great debate, we have produced a strong Wall Street reform bill that will fundamentally change the way our financial services sector is regulated.”
“I am proud of this bill, and I am proud of the open and transparent process that led to such a successful result.”
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