President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country’s biggest banks, marking the administration’s latest assault on Wall Street in what could mark a return — at least in spirit — to some of the curbs on finance put in place during the Great Depression.This is an important change of course that, while still far from complete, represents a major victory for Volcker – who has been pushing firmly for exactly this.
“The heart of my argument,” Mr. Volcker said, “is who we are going to save and who we are not going to save. And I don’t want to save what is not at the heart of commercial banking.”
A few days ago as part of the Group of 30, Volker offered 18 recommendations relating to financial regulatory reform.
Among those recommendations:"Large, systemically important banking institutions should be restricted in undertaking proprietary activities that present particularly high risks and serious conflicts of interest. Sponsorship and management of commingled private pools of capital (that is, hedge and private equity funds in which the banking institutions own capital is commingled with client funds) should ordinarily be prohibited and large proprietary trading should be limited by strict capital and liquidity requirements."
Volker and the Group of 30 also recommended that "Participation in packaging and sale of collective debt instruments should require the retention of a meaningful part of the credit risk."
G 30 Recommendations-Paul Volcker
.jpg)
Posts
No comments:
Post a Comment