Deep within the Dodd-Frank Wall Street Reform and Consumer Protection Act, one of many post-recession reforms designed to prevent future financial crises, you’ll find the much-vaunted “Volcker Rule,” widely credited as a core reform that helps stop banks from making the kinds of risky investments that put consumers at risk. Named for Chairman of the Federal Reserve Paul Volcker, nonprofit policy think tank Demos describes the rule as a means to stop banks “from taking ‘proprietary’ bets for their own profit, with taxpayer-backed deposit funds,” as well as “ban[ning] firms from packaging risky securities for customers and then betting that they will fail,” as Goldman Sachs did in the late-2000s.
Now, Federal bank regulators are trying to sap the Volcker rule of its remaining regulatory power. The move seems suspiciously like an instance of Trump-appointed regulators enacting the will of Wall Street.
On Wednesday, Federal bank regulators released a proposal to soften these measures, which would give Wall Street banks more freedom to make riskier bets. The proposal eases several parts of the the Volcker Rule.
A public comment period on the proposal is expected to ensue for the next 60 days.
“Turning now to concepts and principles, the objective behind this proposal is straightforward: simplifying and tailoring the Volcker rule in light of our experience with the rule in practice,” Vice Chairman for Supervision Randal K. Quarles wrote in the announcement. “This is a goal that is shared among all five agencies and among policymakers at those agencies with many different backgrounds.”
Quarles is an odd choice to be a bank regulator, particularly given that he has a long history as a banker. During his confirmation, Sen. Elizabeth Warren, D-Mass., a fierce critic of Wall Street’s excesses, was deeply skeptical of his abilities and credentials. As CNBC reported on his hearing:
Quarles is founder and head of The Cynosure Group, a private investment firm, and previously was a partner at private equity firm The Carlyle Group. He also has served as undersecretary of the Treasury during George W. Bush’s administration.
Citing his business experience, Warren said, “That’s not a record that should give Americans as a whole a lot of confidence in you.”
“We just went through a devastating financial crisis less than a decade ago because powerful people in government let powerful institutions call the shots,” she later added. “We can’t go down that road again.”
Destroying the Volcker Rule has been a long-coming dream of bankers. For years, financiers have sought to weaken it as much as possible, as former Labor Secretary Robert Reich has written. “Keeping risky assets away from insured deposits had been a key principle of US regulation for decades before the repeal of Glass-Steagall,” Reich wrote in 2011. “The so-called “Volcker rule” was supposed to remedy that. But under pressure of Wall Street’s lobbyists, the rule — as officially proposed last week — has morphed into almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.”
Perhaps the Volcker rule’s death blow has arrived.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy