Volcker Rules Opposed by Wall Street and Republicans

The Baseline Scenario:

I testified yesterday to the Senate Banking Committee hearing on the "Volcker Rules" (full pdf version; summary). My view is that while the principles behind these proposed rules are exactly on target - limiting the size of our largest banks and preventing any financial institution backed by the government, implicitly or explicitly, from taking big risks - the specific rule changes would need to be much tougher if they are to have any effect.

Wall Street is strongly opposed to the Volcker Rules (link to the written testimony; webcast) and the discussion elicited some classic Goldman Sachs moments. Gerry Corrigan, a senior executive at Goldman and former head of the New York Fed, suggested that Goldman Sachs has an impeccable approach to risk management and seemed to imply that the firm was not in trouble in fall 2008. When pressed on why Goldman requested and was granted a banking license - and access to the Fed's discount window - in September 2008, he fell back slightly, "There is no question whatsoever that when you look at totality of the steps that were taken by central banks and government, particularly in 2008, that Goldman Sachs was a beneficiary of this."

Read the whole story: The Baseline Scenario

Comments

[spinns17]

01:22 PM on 02/07/2010

if there crying .it must be right.

[grandtrunk road]

01:29 PM on 02/07/2010

Maybe when you know the difference between they're, there, and their, your opinion will be respected.

[kurtvb]

12:44 PM on 02/08/2010

If Republicans are against it, it must be good for the country.

[jeffp26]

02:53 PM on 02/06/2010

Paul Volcker is the last great Fed chairman. The last one with any integrity whatsoever.

No wonder greedy interests don't agree with him.

[Sundialsvc4]

02:05 PM on 02/06/2010

Here's your answer:

While -you- are testifying, -they- are shoveling millions of dollars a day (this is just what they admit to) to the US Congress.

And meanwhile, every Member, every Supreme Court Justice, every Commissioner full-well knows that if they do NOT obey the commands of "he who's paying," they will surely find themselves the victims of further Extortion. "You can have the Carrot, or you can have the Stick."

The most important lesson of the Parable of the Prodigal Son is that, even though the boy was a prince and could always have gone home, he did not turn away from his path of folly until there was literally nowhere else D-O-W-N for him to go. He found himself starving, and fighting with a pig who, by the way, could have eviscerated him.

There are 308 million of "us," and less than 750 of "them" doing all of this damage to all of "us." At some point, not only "We the People of the United States" but also "We the People of Planet Earth" are going to do ... what even now we could do and always could have done. We will (yes, working within our own established government system!) =compel= change.

The rats will rush off the ship. The ship will turn away from the rocks.

And the rats, down in the bilges, will regroup and once more plot their return.

[rosiebond007]

08:18 PM on 02/05/2010

OF COURSE THEY DON'T LIKE VOLKER - BUT WE DO

TOO BAD FOR THEM - THEY HAVE HAD THEIR HEYDAY NOW IT'S TIME TO PULL IN THE REINS AND PAY ATTENTION TO ORDINARY FOLKS WHO HAVE BEEN SORELY CHEATED.

[patsydecline]

06:40 PM on 02/05/2010

the problem with capitalism is you eventually run out of people to cheat" unknown

[M Jordan]

04:56 PM on 02/05/2010

You really didn't expect them to help the working class, the average American.

[vippy]

04:27 PM on 02/05/2010

Why is the GOP even in the senate, all they do is say no, vote no, do nothing for the people, do nothing for their voter base, but do everything for the corporations. Mind boggling. Do they have at least an alternative plan, no, they don't have time for that. What justifies their existence? Sack them all, they are useless.

[tompoe]

01:35 AM on 02/07/2010

They pursued their free market capitalism ideology, raping and pillaging America, and now need to prove that the utter failure of free market capitalism in a democracy was not their doing.

[vippy]

02:25 PM on 02/07/2010

The media keeps saying that we only have 10% unemployment while FDR had 25% unemployment, which is a lie and everyone knows it. Now the headline states that construction industry has a 24.8 % unemployment. But I am sure we have that in just about every sector these days. Why the lies??? Besides the GAO projects 2/3 of our budget will go to paying the interest only with 9 short years, add to this 75 million boomers that will spike Medicare, SS, etc. Time for a revolution I say.
But people will vote REPUB this time around and go right back to the misery we just got out of. Voting 3rd party myself.

[Tahoedreamer]

04:15 PM on 02/05/2010

Fight on tall Paul

[4TJefferson]

02:42 PM on 02/05/2010

Senator Reid. Please force the gopers to filibuster. Let's have an all out drop dead filibuster of everything in the Senate that the gops are trying to stop for the entire country. If the gopers want to actually filibuster 140 different items of business, then so be it.

[Punkynsnow]

03:45 PM on 02/05/2010

I agree whole-heartedly. Make them filibuster, and don't give in. Once the American public sees this, they will truly understand what obstructionists the GOP lawmakers are being.

Call their bluff. They can't filibuster forever. Right now they are using the threat which has been enough to make the Dems cave in. If you make them actually use the filibuster they will have to back down eventually, and then they will be severely weakened.

[skeptical1]

01:22 PM on 02/05/2010

It will be very difficult to reform this Kleptocracy with the current system of political contributions, which is a system of legalized bribery.

The sad truth is that the general public does not have anyone paying bribes on it's behalf.

[sonofsamphm1c]

01:18 PM on 02/05/2010

A couple of Republicans who have indicated they have problems with the Volcker Rules:

Shelby
Corker

There are probably quite a few Republicans who will support the two most important parts of the Obama reform package:

Systemic risk regulator
Resolution authority

Banks that have openly endorsed those two features:

US Bancorp
Goldman Sachs

Citigroup will agree to almost anything as long as we agree not to pull the plug.

[bluguy8]

01:19 PM on 02/05/2010

we need to pull that plug already. so overdue

[sonofsamphm1c]

01:29 PM on 02/05/2010

You would pull the plug on your own child? Citigroup is our baby. That part we don't own outright, we guarantee.

Oh, and McCain, who is sponsoring the Glass Seagull reissue, probably would oppose Glass Seagull lite - just because he's John McCain.

[treadway123]

12:47 PM on 02/05/2010

So few of you even know what your talking about! It's time your little fingers do some research, than come back an have some intelligent debate. That goes for Both sides on here.

[heathcoat57]

11:31 AM on 02/05/2010

This article is bogus. I read the whole thing. It is nothing but pure speculation by the author that Republicans oppose this. No place in the article does it name a Republican. Nothing but pure B S. BTW, Democrats are in charge of the comittee. If they want it passed it will pass. They don't need Republican support. What a joke.

[Cowboylove]

12:00 PM on 02/05/2010

The Republicans universally oppose this legislation. Ture Democrats can pass legislation, if they use reconciliation, which they need to do across the board. Republicans repeatedly used reconciliation to pass bills, but Obama opposes it on the grounds it is not bipartisan. Screw bipartisanship! Get the job done!

[heathcoat57]

12:14 PM on 02/05/2010

Name the Republicans who oppose this. You can't. Also, there is no bill!!! The Democrats are just talking about it. The Dems don't need reconciliation. The Republicans Have not even talked about it. Like I said, there is no bill. The story is bogus.

[nobluthing]

01:35 PM on 02/05/2010

I’m a Republican (or at least that is the way I am currently registered…another story) and I don’t think this goes far enough. I believe Glass-Steagall should be reinstated.

BTW, I also think the rating agencies played a large part in the recent economic demise. We need new regulation on Wall Street, but who will regulate the rating agencies?...the Fed?...Treasury…yikes!

[getoffmedz]

11:10 AM on 02/05/2010

A decade of no oversight and lack of enforcement on the banks, investment community and insurance companies have spawned this mess which will worsen before it gets any better. Paul Volcker was once fired because the Reagan administration didn't believe he was an adequate de-regulator. This administration has selected the right man for the job.

[heathcoat57]

12:21 PM on 02/05/2010

Volcker opposes McCain Cantwell which reinstates Glass/Stegall Act. So does Dodd & O bama.

[TovSquirrel]

12:54 PM on 02/05/2010

Of course they don't support a re-introduction of any kind of regulation. D.C is run by our betters and they do know best. Just ask them!

[getoffmedz]

05:29 PM on 02/10/2010

You know Paul?

[thefennec]

11:04 AM on 02/05/2010

Quit listening to those crooks.