A few months ago, it appeared that the “Volcker Rule” would be defeated in the United States Senate. However, the version that has been adopted in the legislation currently under consideration in the Senate includes enough of the original proposal to satisfy Paul Volcker. In a Fox Business interview, Mr. Volcker comments on the current legislation and again clearly outlines his main objection to proprietary trading by banks that have implicit or explicit government backing. Read this post for a video of the interview.
It appears that the Volcker Rule is meeting a quick demise in the United States Senate only one month after it was initially proposed. the Volcker Rule is designed to limit the proprietary trading activities of commercial banks. A common complaint by opponents of the rule is that Paul Volcker made great contributions to the country during his tenure as Federal Reserve Chairman but is now too “out of touch” with modern finance and lacks credibility when it comes to reform proposals. Rather than debating the merits of the proposal, too many observers are simply implying that Mr. Volcker is too old to have valid ideas. Read this article for more details.
The Financial Times has published a five part video interview with Paul Volcker who is the head of President Obama’s Economic Recovery Advisory Board. Mr. Volcker discusses his proposed “Volcker Rule” which would limit the proprietary trading activities of commercial banks. For institutions such as Goldman Sachs that may wish to avoid the ban on proprietary trading, Mr. Volcker suggests that they will have to do so without the benefits of a commercial banking license. Read this article for more information and a link to the FT Video.