The newspaper now reports that it appears that Smith is back on Wall Street’s case.
But this time, he’s helping regulators draft rules intended to rein in risky trading.
Smith met with officials at the Securities and Exchange Commission in August to talk about the Volcker Rule, a regulation stemming from the Dodd-Frank financial overhaul that would limit banks’ ability to trade for their own accounts. The meeting was first reported Tuesday evening by Politico.
Armed with a five-point agenda, Smith advised the regulators not to trust Wall Street’s claim that the Volcker Rule would cause liquidity to dry up, according to an S.E.C. memo. He also emphasized the importance of regulating certain arcane financial products 'where the vast majority of money gets made in the trading business'.
Smith’s agenda touched on some of the central debates surrounding the regulation, like the difference between 'market making' - when a bank facilitates trading by customers - and proprietary trading, or trading that puts the bank’s own capital at risk.
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