U.S. rejects Canada's claim that Volcker rule violates NAFTA
Source: Yahoo!/Reuters
The U.S. response came after Canadian Finance Minister Joe Oliver said on Wednesday that the so-called Volcker rule's ban on U.S. banks' use of their own money to trade Canadian government bonds probably did not comply with the North American Free Trade Agreement.
The rule, adopted in 2010 but delayed in implementation, is meant to curb the risky proprietary trading blamed for worsening the 2007-2009 financial crisis, which led to bailouts of highly leveraged Wall Street banks by the U.S. government.
"The Volcker Rule is clearly not a violation of NAFTA or any other trade agreement, all of which explicitly safeguard the ability of the United States to protect the integrity and stability of our financial system," a U.S. Treasury spokeswoman said in an email.
The "prudential" rule protects "taxpayers and the depth, liquidity, and stability of U.S. capital markets," Treasury said. "NAFTA does not weaken our ability to implement Wall Street reform now or in the future, and neither would any trade agreement we're negotiating."
Read more: http://news.yahoo.com/u-rejects-canadas-claim-volcker-162440257.html
House of Roberts
(5,168 posts)Any funds that are FDIC insured aren't 'funds owned by the bank'.
geek tragedy
(68,868 posts)by someone other than the insurer.
House of Roberts
(5,168 posts)is it my money or is it Citibank's? The FDIC insures I get my money back if the bank fails. So if Citibank uses my money to trade Canadian government bonds, it's not their money, and it's not allowed.
geek tragedy
(68,868 posts)In the case of deposits, Citibank is borrowing the money from you and has to pay it back whenever you want it.
When you deposit the money, it becomes Citibank's money and they can use it how they want, subject to relevant regulations. They aren't keeping it safe for you, you're lending it to them so they can use it to make money, and they agree to pay it to you whenever you want.
The FDIC insures the debt that Citibank owes to you, it's more like a loan guarantee.
House of Roberts
(5,168 posts)I plan to keep my money in the credit union. They aren't gambling with it, if they are making secured loans for houses and cars, etc. At least there's an asset involved, instead of an intangibly valued security of some sort.
still_one
(92,130 posts)geek tragedy
(68,868 posts)Why do you think banks accept deposits for free? It's so they can use that money to fund their lending and investments.
They don't hold the money in trust for the depositor--instead that money gets used to lend to other parties at an interest rate.
http://www.investopedia.com/terms/b/bank-deposits.asp
still_one
(92,130 posts)It is insured up to a certain amount by the FDIC or other entity, and you also have the right demand access to the money at anytime
I agree your deposit of money in a saving or checking account is a loan, and I agree the bank or institution can use the money for its use within government regulations. Another reason why deregulation put our deposits at more risk
but they have a responsibility to keep the money safe, and must keep a minimum reserve which was increased since the melt down
If a depositor requests money they have to provide it on demand, provided the account has sufficient funds
geek tragedy
(68,868 posts)to describe a shared understanding.
still_one
(92,130 posts)PSPS
(13,590 posts)Foreign companies and governments can sue to overturn laws that "reduce profit" thereby rendering any domestic US law-making organ, such as the federal or state congresses, irrelevant. This is what "Our Great Leader" is trying to force down our throats. You know, "eat your peas" and other such drivel. Sorry, swooners. He's a charlatan.
geek tragedy
(68,868 posts)1) Canada is not suing, they are complaining
2) Suing, even if it does happen, does not mean something gets overturned
3) They are not allowed to sue to have laws stricken. The only remedy is a monetary penalty to be paid by the losing government.
4) The same Obama that you hate so much is the same one stating that NAFTA doesn't limit our ability to regulate financial markets. So, you're spewing incoherent gibberish.
d_legendary1
(2,586 posts)1. He didn't mention anything about Canada.
2. TTP would make it easier to sue a government and through a tribunal process where they would most likely lose.
3. Its our government so guess who pays out of pocket: we do!
4. Obama loves TTP and has raised his middle finger at anyone who talks trash about it.
There are tons of TTP stories in G.D. that give small details about TTP. Get it right!