By Ryan Tracy And Scott Patterson
WASHINGTON--The Federal Reserve on Thursday said it would give
banks two more years to sell private equity and hedge fund stakes
covered by the Volcker rule, a win for banks who had requested more
time to unwind positions.
The Fed move effectively extends from July 2015 to July 2017 a
deadline by which banks would have had to sell the fund
investments, which are barred under the rule's restrictions on bank
trading. The move will "reduce the potential disruptive effects
that significant divestitures of covered funds could have on
markets," the Fed said in an order announcing the change.
Since the Volcker rule was adopted a year ago, banks have been
pressing regulators for a multiyear delay of the requirement for
them to pull out of private equity and other funds. Firms such as
Goldman Sachs Group, Inc., Morgan Stanley, and J.P. Morgan Chase
& Co. will benefit from Thursday's news. Goldman alone has
about $7 billion invested in private equity, according to a
November regulatory filing.
Write to Ryan Tracy at ryan.tracy@wsj.com and Scott Patterson at
scott.patterson@wsj.com
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