Posted on 10/13/2011 5:10:56 PM PDT by Kaslin
Banking: Regulators have unveiled their long-awaited plan to limit the risk taken by U.S. banks. But the so-called Volcker Rule is a nightmarish piece of financial legislation that fixes nothing and may create another crisis.
When in doubt, regulate. That might be the motto of the current White House. It certainly describes the latest dictum to spring out of the egregious Dodd-Frank financial reforms. The Volcker rule, named for former Fed Chairman Paul Volcker, aims to avoid another financial meltdown like the one that devastated Wall Street from 2007 to 2009.
It does so by barring banks from making short-term trades for profit in their own accounts in securities, derivatives and other exotic financial products. The new rules would also prohibit banks from holding more than 3% ownership in hedge or private equity funds.
Sounds simple, but it's not. In fact, it will further damage U.S. banking, leaving the system weak and vulnerable to the next downturn. Some reckon it will cost the banking industry — not in the best of shape, despite the bank-bashing now going on — as much as $25 billion.
(Excerpt) Read more at investors.com ...
Easy fix, just roll back to before all of the bought and paid for legislation by phil gramm. Things were working well and he screwed it all up.
Lol. Banks = Hedge Funds these days.
There is no money to be made by simply loaning out money? Basic stuff like that?
This will hit the big 6 or so, but, I doubt community banks and credit unions give a dam.
Banks need to go back to investing in their community and small businesses. The bedrock of our financial sector should not be speculating with investments in the derivatives market while putting my savings, as well as my borrowing potential, at risk.
Actually, it is not at your risk, but at mine (or I should say ours). Since your deposits are FDIC insured, they can play risk free and we get stuck with the damages if they are too great.
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