Vocal opposition from banks didn’t stop U.S. financial regulators from approving the so-called Volcker rule, which bans proprietary trading.

Yet the real threat to the rule never came from Wall Street. It is coming from the courts. Unless regulators can defend the rule based on principles of economics, it could go down in flames.

For a long time, courts gave financial regulators a free hand. The statutes that confer authority on those regulators are broad, and courts never felt themselves qualified to second-guess agencies with the technical expertise and the experience to understand the arcana of finance.

Read more at Bloomberg.com