Regulation of the Proprietary Trading by Banks with Investment Instruments

This paper surveys the regulatory response to the global financial crisis with an emphasis on the regulation of the proprietary trading by banks with the speculative investment instruments. We discuss not only changes in the US regulation, but we also focus on the implementation of the Vickers rule in the Great Britain. The Dodd-Frank Act introduced quite promptly sensitive regulation of the proprietary trading by banks. Regulatory response to the global financial crisis changed significantly the regulatory-supervisory approach to the EU banks as well. However, the proposal new European directive on structural measures increasing the resistance of the banks has a very restrictive nature, because it surprisingly connects both Volcker and Vickers rule.