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Volcker Rule Arrives as Hidden Gem in Dodd Frank 

December 12, 2013
Peter Morici, The Street

U.S. regulators are finally implementing the Volcker Rule, and it may prove to be the hidden jewel in the Dodd-Frank financial reforms.

The rule limits bank purchases of stocks, bonds, currency, commodities, and derivatives -- contracts that bet on movements in the prices of assets -- with their own money, which also put their federally insured deposits at risk.

Financial behemoths such as JPMorgan Chase earn huge profits from such proprietary trading. Those profits help pay huge bonuses for traders and also create great jobs for many ordinary Americans. Unfortunately, trading distracts attention from the ordinary business of taking deposits and lending money to small businesses and homeowners.

It sounds reasonable. Encourage banks to be banks again by pushing them toward lending by prohibiting trading, essentially making bets with deposits ultimately guaranteed by taxpayers.

Read more: The Street

 
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