Fed’s Dudley: liquidity warnings a ploy to weaken regulation

“Most arbitrage trading has simply ceased,” Goldman exec counters

Federal Reserve Bank of New York president William Dudley

Opponents of tougher bank regulation are propagating a straw man argument over deteriorating market liquidity, the president of the Federal Reserve Bank of New York said yesterday.

"Some opponents of tougher bank regulation claim that the increased regulatory requirements, such as the higher capital requirements and new liquidity standards, that have been imposed on large financial institutions have reduced these firms' market-making capacity. As a result, so the argument goes, this is leading

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