US ban on high-risk bank trades approved

[OneCrazyDiamond]

Source: seattlepi.com (AP)

WASHINGTON (AP) — U.S. banks will be barred in most cases from trading for their own profit under a federal rule approved Tuesday.

The Federal Reserve and the Federal Deposit Insurance Corp. each unanimously voted to adopt the so-called Volcker Rule, taking a major step toward preventing extreme risk-taking on Wall Street that helped trigger the 2008 financial crisis.

Three other regulators were expected to follow suit Tuesday.

Read more: http://www.seattlepi.com/news/article/US-ban-on-high-risk-bank-trades-approved-5051097.php

---

[aptal]

1. Awesome!!!

Bet the Wallstreet jocks are crying in their beer over this one.

[benld74]

2. I wish the US could/would have followed what Iceland did,,,,,,,,,,,,,,,,

[dipsydoodle]

3. Nationalise the USA's three biggest banks ?

Which three should the US have nationalised ?

[benld74]

4. ALL

[dipsydoodle]

5. And the US government would have the funds from where to do that ?

Just print it as usual ? You're talking trillions here.

[another_liberal]

6. Nationalizing a bank doesn't cost the government anything.

There may be some compensation for the former owners, but it is not mandatory. Nationalization is, after all, a seizure of property.

[grahamhgreen]

18. The banks would have been free, they were 16 trillion under water. We bailed them out and got nothin

[Brigid]

7. This is a case where we need to go back to the good old days.

There was a time when banks were tightly regulated and mostly local in orientation, and did not dominate the entire landscape.This period was also the period of our greatest prosperity. We didn't have financial crises every time we turned around. Coincidence? I think not. See "Inside Job" for further details. This is a step in the right direction.

[WinstonSmith4740]

14. That was a great book!

Very informative and highly recommended for the youngsters here at DU. And by "youngsters" I'm talking about anyone that was not politically aware during the Reagan/Bush & Bush/Quayle administrations.

[Brigid]

20. Actually, I was referring to the movie.

It was both fascinating and infuriating. But now I gotta find the book.

[SharonAnn]

17. Yes, banking was boring. IT WAS SUPPOSED TO BE BORING!

[Veilex]

8. Huh?

Wait a sec... I thought the Volcker rule set this as the law of the land... I was sure it didn't matter what the FDIC or Federal Reserve chose to adopt... did I miss something? Is the FDIC and Fed Reserve now able to supersede law? Why is this even a news article?

Some of this may sound like snark, but seriously, could someone enlighten me as to why this matters?
Would be much appreciated!

[Dopers_Greed]

9. Is this an effective rule, or did lobbyists fill it with goodies?

I guess we'll find out based on how loud Faux and Wall $treet screech.

[calimary]

10. Welcome to DU, OneCrazyDiamond!

Glad you're here! I hope this is just the beginning. Much tighter curbs are urgently needed - on the recklessness of the big banks and financial institutions. I realized awhile ago one of the biggest reasons we do need government. If they won't do the correct, fair, reasonable, or ethical thing on their own, sometimes something else has to step in and make them do it.

[OneCrazyDiamond]

15. Thank You.

Glad to be here.

[Lint Head]

11. Excellent! But Glass Steagall still needs to be considered if ths doesn't work.

[OneCrazyDiamond]

16. Glass Steagall

needs to be reality now.

[sakabatou]

12. It's a good start

[Voice for Peace]

13. Thanks Occupy!!!

[albino65]

19. And yet

The house passed the Swaps Regulatory Improvement Act (HR 992) which repeals the provision in the Dodd-Frank law that banks push derivative trading to separate business units that are not covered by federal insurance. Consequently banks will be able to continue trading derivatives in-house and rely on the fed to bail them out when they make a bad bet if this becomes law. This is exactly what caused the banking crisis to begin with. Essentially we are bankrolling their casinos. 70 of the 85 lines in this law were written by Citigroup lobbyists. Apparently their stooges are not bright enough to write a bill on their own. What is truly horrible is that 70 house democrats voted for the repeal. We might need to ask ourselves if we are going to support the Linos when they act like this.

[jmowreader]

22. How to shut this shit down in a heartbeat

Have one of our more reliable senators - Elizabeth Warren comes to mind - write and bring to the floor a bill making slot machine players guaranteed against losses. When asked why, she simply has to hold up the Swaps bill and point out that it is also a bill guaranteeing slot machine players against losses, except on the derivatives slot machine it's a million bucks a pull and when you get two lemons and a tomato the machine holds up a little sign telling you to put in another million right now or it'll change the locks on your house.

[RickFromMN]

21. I will believe it when I see it.

I hope the Volcker rule applies to trading desks and subsidiaries overseas.

I hope the banks don't find a sneaky way around the Volcker rule.

Otherwise, I could see a bank setting up a "special" subsidiary in a not so well regulated jurisdiction, funneling money to this subsidiary on the pretense funneling money to this subsidiary is a "safe" transaction, and laughing all the way to the bank when profits roll in, and pleading global financial disaster and getting public assistance when losses roll in.

If the banks can't do the above trick, they will keep looking, trying to find another trick, and another, until they succeed.

In other words, I don't believe it. I will only believe it when I see it.

Burn me once, shame on you. Burn me twice, shame on me. How many times do we have to be burned?

We have to fix the big banks so they are not too big to fail.

Why do we need big banks any more? They seem more intent on investment banking than lending.

Let local mom-and-pop banks, or regional banks, not interested and not able to play investment banking, do the lending.

Get rid of the big banks. Tax them out of existence in the name of making them cover their losses when they fail again.

I didn't say if they fail again. I said when they fail again.

I'm sorry. I will only believe it when I see it. I'm sorry I'm so pessimistic, but I am very pessimistic.

[JDPriestly]

23. This is a welcome improvement.