Ex-Fed Chairman Paul Volcker to urge curbing risky trading by commercial banks
I fully support Mr. Volcker’s stance on this issue. Even though it is extremely profitable for commercial deposit taking banks to do trading on their own books, they should either convert into a investment bank or stick to lending which is still very profitable if done properly. As I have stated before on here, our commercial banks should be our most risk adverse institutions and that is why prudent regulations are needed and should be in place to limit this.
Investment banks are on the other hand, not regulated very much so they are allowed to make very risky trades and profit greatly. Conversely, if they make bad choices they should be allowed to fail without the same assistance that our vital commercial banks get if we have a classic “run” on the bank.
Washington D.C., Reuters - White House economics adviser Paul Volcker will urge Congress on Tuesday to rein in risky investing by big banks to help prevent them becoming “too big to fail,” according to testimony obtained by Reuters.
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Ex-Federal Reserve chief Paul Volcker says U.S. now in recession
Ahh, my hero ex-chairman Mr. Volcker. If only others would have the discipline you displayed to contain inflation. I think if you talked to the average business person that you would agree we are in recession. In the article he talks about some of the same issues that have been discussed here daily. We are looking too short-term in our goals for this financial crisis.
Many times the short-term gains you have, may not be worth the lasting long-term effects you cast on an economy. At some point we will have to deal with this debt, trade imbalance, credit creation/inflation and destruction of the middle class in the U.S. and not amount of credit will fix those problems. We have a system and culture that is not sustainable and will fall apart at some point in the future. It is good to take some punches on lip so you know what it feels like. The goal of life, atleast in my book is not to achieve ultimate convenience but to affect change and leaving life better than it was left to me.
Press Release:
Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing sector faced more losses and the economy was in recession even as authorities moved to stabilize the financial system.
Volcker said the priority for U.S. authorities in the credit crisis was to stabilize the financial system even though that meant heavy government intrusion.
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