The "Volcker rule" is a simple thing. Basically, it says that if
you're a bank that takes deposits and benefits from federal deposit
insurance, you can't also make risky trades that might blow up your bank
and cost the taxpayers a bundle. Wall Street never liked the rule,
because banks make a lot of their money these days trading for their own
accounts and didn't want their trading profits cut off. They fought the
idea in Congress, but in the end, the Dodd-Frank bill that passed in
2010 included a version of the Volcker rule in its final draft.
Was this a victory for common sense? Hardly. Last month regulators unveiled their first take on the actual implementation of the Volcker rule, and it had become a monster. "Only in today's regulatory climate could such a simple idea become so complex, generating a rule whose preamble alone is 215 pages, with 381 footnotes to boot," complained American Bankers Association Chief Executive Frank Keating.
Was this a victory for common sense? Hardly. Last month regulators unveiled their first take on the actual implementation of the Volcker rule, and it had become a monster. "Only in today's regulatory climate could such a simple idea become so complex, generating a rule whose preamble alone is 215 pages, with 381 footnotes to boot," complained American Bankers Association Chief Executive Frank Keating.
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