"Republicans in the House have been trying for years to chip away at the Dodd-Frank law, which Congress enacted with mostly Democratic support to tighten regulation with an eye to preventing another crisis."
Their latest move (which is likely to pass) will give U.S. banks two extra years (until 2019; perhaps because the banks don't have enough money to get in compliance quickly enough lol) to ensure that their holdings of certain complex and risky securities don't put them out of compliance with a new banking rule. It would also revise the "Volcker rule" which would limit banks' riskiest trading bets, the kind of speculative investments that do not benefit their customers.
Dodd-Frank: http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act
Volker Rule: http://en.wikipedia.org/wiki/Volcker_Rule
It's the investment banks and the ultimate cesspool itself, the Federal Reserve, that needs to have pressure, regulations, strict scrutiny put on them, and in the Feds case, abolishment. 😉
The fed would be a giant swing and not something to jump into lightly because you can get your bottom dollar all the vultures would swing in to get their power.
This whole notion of deregulating the banks is insanity. IMO, if you want to be FDIC insured you can only issue and make interest off of loans. You cannot use that money to divide up into other products or invest in anything (regardless of them seeing it risky or not… it's all a risk, every prospectus I get reiterates it's a risk). Until we remove that the banks will just continue to play monopoly and we'll continue to have to bail them out.
+Paul Spoerry
That last line is the crux of the problem. If they roll the dice, so to speak, and come up craps, then they need to go under. No more of this 'too big to fail' crap.It's what Capitalism is about, risk/reward. If you take out the risk side of the equation, then of course greedy folks are going to bet big.
I still want to see all deposits FDIC insured, that way when the ship sinks, the little guy, who makes up the foundation of the pyramid (and has the most at stake) gets the first seats on the life boat.
Agreed +West Kagle but what I'm saying is that in order to BE FDIC insured, it should only be for institutions who lend money, and only make profits based off the interest of those loans. To be FDIC insured, they would be disallowed from using the funds their holding to make risky, or ANY, financial plays. We need to make banks be banks, and then the investment arm of things that gambles with the money has to be something else and that end of things shouldn't be FDIC insured. So for instance a 401k or Roth wouldn't be FDIC insured, because it's gambling on the stock market. But my savings account, my mortgage, etc would all be safe and sound, FDIC insured, but the people holding those assets wouldn't be allowed to use those asset for other things. They'd have to hold those assets and only make money off of the interest derived from holding them.
+Paul Spoerry
That sounds good. I like the idea of having two separate institutions in the 'banking' world. That way folks who are just in it to have a safe place for their money, do not have to be limped in with those willing to risk it all (and the government can insure each according to the risk).
The only problem I have with this piece is that former Chairman Frank and Chris Dodd were in office long before the “Great Recession” and made no effort until the collapse to establish rules which have made both of them outrageously rich, highly-paid consultants. I do not side: Republican or Democrat, only with the best.
However, PaulSpoerry.com is a great contribution. Who am I to argue with someone as “awesome” as you. Just call me jaded.
I think that's a fair criticism +Melanie Holzman; where were they before it all went down? But that's more about the people and less to do with the law. It's the portions of the law they're attempting to repeal that concern me.
+Paul Spoerry Thks for reply. When we get the lobby money out of politics, I may become less jaded.
I did notice that not only are you awesome, you reference. I would vote for you! But I bet even if you wanted to get into politics, you do not have the money to run for office. There's the rub.