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Republican "Regulators" End Ban on Risky Wall Street Trades That Previously Crashed Global Economy
Our banking regulators, who are supposed to create and enforce rules that product us, have removed regulations for Wall Street banks, giving them one of their biggest wins under the Trump administration.
The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) on Tuesday [8/20/19] adopted a weakened version of the so-called “Volcker Rule,” which bans banks from making high-risk bets with their own assets.... the OCC and FDIC... approval of the proposal is the first step in a massive lobbying victory for some of the largest U.S. banks.
The Volcker Rule was one of several provisions of the 2010 Dodd-Frank Wall Street reform law designed to ban risky and overly complex investments that helped crash the global financial system in 2008.... the Volcker rewrite effectively guts the rule and does nothing to prevent the build-up of risk that led to the 2008 financial crisis.
The changes, first proposed in May 2018, followed years of lobbying by banks, including Goldman Sachs, JPMorgan Chase and Morgan Stanley....
Yes, the banks are still at it. This is the very same Wall Street recklessness that led to economic disaster and ruined millions of lives across our country. Unless we end their greed, American taxpayers will be on the hook again.
FDIC Commissioner Martin Gruenberg, a Democrat who backed the Volcker rewrite proposed in May 2018, voted against the final rule Tuesday, saying it would “effectively undo” the rule’s protections. In particular, he warned that the new rule narrows the definition of banned trading in a way that could free up banks to engage in riskier bets with potentially billions of dollars in financial instruments. The other three FDIC board members, all Republicans, voted in favor.
“As the threats from leveraged lending and global uncertainty increase, greedy Wall Street banks and Trump regulators are determined to put the financial system and working families in danger,” said Sen. Sherrod Brown(D-Ohio), ranking Democrat on the Senate Banking Committee.
Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, said the revisions “will not only put the U.S. economy at risk of another devastating financial crisis, but it could potentially leave taxpayers at risk of having to once again foot the bill for unnecessary and burdensome bank bailouts.”
Here's some specifics of the changes that Republicans appointed by Trump are green lighting to dismantle the significant protections put in place in 2010 after banks collapsed the entire global economy:
The new rule would scrap a requirement for banks to prove that trades enacted to make markets for clients’ speculative investments and efforts underwrite stock offerings comply with regulation as long as the firms follow certain risk mitigation requirements.
The revision would also exempt banks below certain asset thresholds from the rule, create three levels of increasing compliance requirements for banks based on size and complexity, and allows banks to use a looser standard to calculate risk for certain investments.
History repeats and Republicans are either too corrupt or too stupid to realize or care.
Sources:
https://www.reuters.com/article/us-usa-banks-volcker-idUSKCN1VA1B8