Investigations done independently have shown little evidence that investment trading by banks, particularly with derivatives, had much to do with the 2008-2009 financial meltdown problem.
Nevertheless, Dodd-Frank regulations have attacked this “problem” anyway with the so-called Volcker Rule, because it was suggested by the former Fed Reserve chairman. Exemptions are given for U.S. government debt.
Unfortunately, the limitation of a bank’s ability to trade its own and customer securities dries up liquidity. European banks are vehemently against the rule and will take their business away if necessary. (See the Earl J Weinreb NewsHole® comments.)
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