Thursday, June 25, 2020

Big Win For Banks: Regulators Ease Volcker Rule

U.S. banking regulators are about to ease restrictions created in the aftermath of the Great Recessions, reports CNBC.

The news is sending bank stocks surging today.

Federal Deposit Insurance Commission officials said on a call that they are loosening the restrictions from the Volcker Rule, allowing banks to more easily make large investments into venture capital and similar funds.

The banks will also be able to avoid setting aside cash for derivatives trades between different units of the same firm, potentially freeing up billions of dollars in capital for the industry.

Of course, there should have never been these regulations on the industry in the first place.

Paul Volcker is dead and now his silly micro-managing rules are also gone.

Of course, the big picture problem remains, the fractional reserve banking structure that results in the creation of money out of thin air which creates distortions in the economy and the business cycle (See: The Mystery of Banking).



  1. I don't mind if banks want to make stupid balance-sheet investments outside of their areas of competency, but it bugs me that no bank will ever go out of business when these mistakes come to fruition. Instead, we will all be forced to bail them out.

    1. Exactly right! You want to adhere to unwise fiscal decisions, you should die by them and let other more prudent financial organizations replace your sorry *&s.

      No one is made to be responsible anymore.