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The US is undoing post-2008 financial regulation and people are worried

The Fed wants to undo the Volcker Rule, which stops banks from trading unless it's for a specific client

The US Federal Reserve – their central banking system – wants to get rid of one of the key regulations put into place after the financial crash, because it's 'too complex'. Uh-oh.

What it means: Post-2008, banks were obviously under a lot of pressure to make sure that whole shebang never happened again.

Recap: In a very summarised nutshell, banks work by taking the money we deposit into them and trading it to make more money. One of the reasons the crash happened is they got carried away betting people's money on deals that never came through, and then losing it all.

The Volcker Rule, one of the regulations to come out of the crash, basically said banks had to prove that the investments they were making were genuinely useful for a client, not just speculative gambles.

But the six biggest banks in America have lobbied to change the rule, saying it's too complex, muddled, and difficult to comply with. Under a new proposal from the Federal Reserve, banks would monitor internally, rather than have to prove themselves to governments.

Nothing's been decided yet – the proposal's got to go through a few more agencies first. But people are already getting worried: even Volcker himself has come out and said he's all for making things simpler, as long as we don't end up rolling right back to where we started, and causing another crash.

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Reader Comments

  • WhereAreTheVikings

    What a terrible, terrible shame. Western Civilization nurtured capitalism, and now capitalism is destroying it. And these young people seem to welcome the invasion of their homeland. The media and schools have been very efficient in wiping out all traces of blood and soil.

    • prollawalllynotahumanoid

      Capitalism isn’t the problem. It’s corrupt politicians taking bribes and kickbacks from Globalists and the Chinese.

      • WhereAreTheVikings

        Maybe I should have said crony capitalism. Although Italians importing Chinese to make “Italian leather” shoes is not crony capitalism. It is capitalism, pure and simple.

        • prollawalllynotahumanoid

          That would be crony capitalism and globalism combined. They aren’t concerned with the affect their policies have upon their citizens, the health and welfare of their society and culture or their economy. What it isn’t is fair-free trade to further national interests.

          • WhereAreTheVikings

            I’ve always seen them as one and the same, but perhaps they need to be named individually, just to bring home the point.

      • WhereAreTheVikings

        But now that travel is so easy and borders are virtually down through H1bs and the like, theoretically you can’t blame capitalists for the pursuit of cheaper labor, although I do heartily blame them not being more patriotic than that. Perhaps the emerging nationalism will force them to voluntarily do what they should have morally been doing all along, and that is employing business practices that preserve their countries and nationalities. The government should be doing everything it can to encourage that, to the extent that small government should do anything but guard the borders and strictly, drastically, limit immigration.

      • Henry Lam

        It is China with its corrupted mindset affecting the world.

        • prollawalllynotahumanoid

          No it is not. Capitalism is the fairest and least corrupt system of all.

          Socialism and communism is based on authoritarianism, coercion and police intimidation. It has and always will be rife with criminality, bribes and kickbacks.

          Corruption can be anywhere but it is the very basis of socialism and communism.

    • Henry Lam

      The government is too weak. They do not understand the mindset of communists and how they educate their people. Those communist people are only loyal to their country and could be dangerous. The immigration law should only accept those who accepted multiculturalism and taught from a democratic education system. This virus events clearly has shown how stupid to take China as a friend.

      • WhereAreTheVikings

        The government is not too weak. Just weak-minded about some things.

  • Gabi Rodrigues

    For how many days can a country maximum close their borders to foreigners maximum? Like now, with the virus, everyone is using 30 days. Can it be more?