FOR IMMEDIATE RELEASE
Thursday, October 18, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Regulators Should Not Repeat The Mistakes Of The Past By Unleashing Wall Street’s Biggest Banks To Gamble With Taxpayer Money
The Volcker rule ban on prop trading should not be weakened
Washington, D.C. – Following the submission of a comment letter on proposed changes to the Volcker Rule, Dennis Kelleher, president and CEO of Better Markets, issued the following statement:
“As we mark the 10th anniversary of the catastrophic 2008 financial crash, this is no time to return to the failed and discredited policies of the past which deregulated Wall Street and pretended that the biggest banks would police themselves. Yet, that is what the proposed changes to the Volcker Rule’s ban on dangerous, high risk proprietary trading would do. It creates numerous loopholes, intentionally blinds regulators, eliminates reporting requirements, and leaves the banks to self-regulate.
“This will gut one of the most critically important and successful provisions of the Dodd-Frank Act. The Volcker Rule reduced Wall Street’s most socially useless gambling which also reduced the corrosive swaggering trading culture that incentivized ‘swing for the fences’ bets that infected the biggest banks. Worst of all, this culture and distorted bonus-boosting incentive system had the additional downside of diverting these banks’ activities away from those that support the productive economy, which is the only reason for the safety net and taxpayer backing in the first place.
“Weakening these protections, as the proposal does, ignores the most important and basic lessons of the crisis: the need for vigilant, independent and robust oversight and regulation to prevent financial firms from building up so much risk that the safety and stability of our financial system and economy are threatened.”
Read our entire Comment Letter on the Proposal here and refer to our frequently updated dedicated webpage for developments and background information here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
