The Tricky Volcker Rule and Your Pocketbook

The Volcker Rule is named after the former Federal Reserve governor, Paul Volcker, who is now an adviser in the Obama administration. The Rule has been suggested to keep banks from trading in their own securities, while handling those of clients.

The question whether is if it's needed. If proprietary bank trading is long-term, that is, for terms of over 45 or 60 days, it certainly requires little strict regulation.

How does this all affect the average citizen?

It's foolish to get into complicated regulatory restrictions that do lots of damage to the entire global banking system, without any realistic safety or risk enhancement on books of the banks. On the contrary, lots of damage will be inflicted instead.

Big banks are becoming bigger, too big to let fail in a financial emergency. And that causes major risk when government bailouts must be applied.

All the while, smaller banks are being hurt by the cost of regulation and are being put out of business. The consumer and the economy are thereby hurt. (See the Earl J. Weinreb Newshole(r) Commentaries.)

Big banks are becoming bigger, too big to let fail in a financial emergency. And that causes major risk when government bailouts must be applied.

All the while, smaller banks are being hurt by the cost of regulation and are being put out of business. The consumer and the economy are thereby hurt. (See the Earl J. Weinreb Newshole(r) Commentaries.)