Bill Black: Volcker Rule Approved But "Not Enforceable"

[BelgianMadCow]

Transcript at The Real News Network. I think it's wise to realise that the Volcker rule is nowhere near Glass-Steagal.

Bill Black's take chimes with the one of Naked Capitalism:

If you managed to be late to the Volcker Rule party, you can learn a great deal of what you’d need to know via the revealing contrast between two reasonably detailed accounts, one at Huffington Post by Shahien Nasiripour, the other by Matt Levine at Bloomberg. If you didn’t know better, you’d wonder if they were talking about the same rule. But in fact the disparity makes perfect sense: bank stalwart Levine is chipper about the outcome, while Nasiripour stresses how many of the provisions recommended by regulators themselves (!) never made it into the final version.

But let’s step back a bit. The Volcker Rule was an afterthought to regulatory reform, not that the authorities were as serious about that as they should have been in the first place. Remember the genesis: This was a sketchy idea put forth by the White House right after it lost its filibuster-proof Senate majority due to the election of Scott Brown in Massachusetts and it thus felt pressured to burnish its leftie credentials. It was surprising that Volcker allowed his name to be attached to it. But then again, Volcker never demonstrated much enthusiasm for it. I’m told on good authority that he was asked repeatedly to put forth a serious proposal (clearly, the use of his name allowed him to take advantage of the situation) and he demurred every time. And we were never keen about it: the prop trading/customer trading was a spurious distinction, and treating commercial banks as the only backstopped entities after the rescues of then non-banks Goldman and Morgan Stanley as well as AIG was also dubious. That’s not to say the high concept could not have been massaged into something to reduce subsidized speculation, but it was obvious there was not the will to do that.

[imthevicar]

1. SEE,

Regulating doesn't work!

[JDPriestly]

2. This explains why Elizabeth Warren's cautioned that whether the Volcker Rule is a good thing

depends on how it is enforced (I'm paraphrasing.). Excellent post. Thanks.