FDIC backs barring banks from trading for own gain

Source: AP

ASSOCIATED PRESS Wednesday October 12, 2011 5:47 AM

WASHINGTON — Banks would be barred from trading for their own profit instead of their clients’ under a rule federal regulators proposed yesterday.

The Federal Deposit Insurance Corp. backed the draft rule on a 3-0 vote. The ban on so-called proprietary trading was required under the financial overhaul law.

Critics dismissed the effort as weak and marred by loopholes. And banks said that it would hurt the economy. The FDIC’s vote puts the rule out for public comment.

The Federal Reserve has also approved a draft of the proposal, called the Volcker Rule after former Fed Chairman Paul Volcker.

Read more: http://www.dispatch.com/content/stories/business/2011/10/12/fdic-backs-barring-banks-from-trading-for-own-gain.html

regulations repealed in 1999. A wall between commercial banks and investment banks preventing speculating with depositors money.

Much of the current economic mess would have been prevented.

Silly me, I thought it was the depositors money.

Bankers are clever enough to take the profits from very risky, even dishonest trading and then leave a bankrupt institution for the FDIC to bail out.

I'm not saying that has happened. I'm not well enough informed to know whether that has happened. But it is certainly possible under the rules that now exist if my understanding is correct.

investment sector if we don't bar banks from gambling with their money.

And bankers' personal investments should be reported -- not openly published -- but reported to the FDIC to insure that bankers as individuals are not manipulating markets or doing what amounts to insider trading.

their customers, etc. as competition that should be crushed. And now the middle class has been crushed by them.