Article • Dean Baker’s Beat the Press
Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
Center for Economic and Policy Research
1611 Connecticut Ave. NW
Suite 400
Washington, DC 20009
Tel: 202-293-5380
Fax: 202-588-1356
https://cepr.net
The Washington Post had a useful piece on the Treasury Department’s adoption of a stronger than expected version of the Volcker Rule, which is likely to seriously limit the extent of proprietary trading at the major banks. At one point the piece tells readers;
“In anticipation of the Volcker rule, many large banks, including JPMorgan, have shuttered or spun off their proprietary trading desks, as well as their private-
equity arms and hedge funds. That could blunt the full force of the rule, analysts say.”
It’s not clear what this could mean, since the point of the Volcker Rule was to keep banks from engaging in proprietary trading. If they have spun off their trading desks then its purpose will have been accomplished. The goal is not to prevent trading, but to prevent banks from effectively speculating with government guaranteed deposits.