The Volcker Rule, the White Rabbit and Alice in Wonderland

Needless to say the Glass-Steagall Act should never have been repealed. So here is a write-up on one of the many little rules which have come down since the repeal that attempt to make it all OK. More on this later.

Now comes the Volcker rule from the SEC and four other federal regulatory agencies, acting in response to instructions by Congress in the Dodd-Frank Act. (That would be the 2010 law that promised to end too-big-to-fail and didn’t.) The Volcker rule promises to end proprietary trading by federally insured banks, except in those instances when it doesn’t. And there’s some merit to having a ban: Lots of people dislike the idea of banks gambling with federally insured customer deposits, because they might blow themselves up and either cause damage to others or require a taxpayer bailout.

Read the full article here.

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