Banks that trade for their own accounts should not benefit from the implicit backing of taxpayers, and Wall Street's opposition to new rules curbing such activities is unfounded, a top Federal Reserve official said on Monday.
Federal Reserve Governor Sarah Raskin, a former Maryland financial regulator, said the notion that derivatives markets enhance firms' ability to raise capital was questionable.
"I view proprietary trading as an activity of low or no real economic value that should not be part of any banking model that has an implicit government backstop," Raskin told students at the Graduate School of Banking at Colorado in remarks made available in Washington.
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