Courtesy of Pam Martens.
CFTC Commissioner, Bart Chilton, Says the Volcker Rule Puts a Velvet Rope Across the Doorway of the High Roller's Room. That's Exactly the Problem.
If you were a fan of the Dodd-Frank financial reform legislation that did absolutely nothing to rein in Wall Street’s ability to plunder the life savings of the little guy, you will absolutely love the Volcker Rule that was approved, but not instituted, yesterday by five regulators. Just like Dodd-Frank, it’s voluminous, running over 800 pages, postpones the actual enactment into the distant future, and is chock full of loopholes and slippery passages.
The so-called Volcker Rule is Section 619 of the Dodd-Frank legislation. Its original intent was to quickly stop banks holding insured deposits from speculative trading for their own account (proprietary trading). It was also meant to prevent banks from owning hedge funds and private equity funds which could potentially blow up an insured depository institution and require the kind of taxpayer bailouts that occurred in 2008.
We can now emphatically tell you that both the Dodd-Frank legislation and its Volcker Rule are nothing more than full employment programs for Wall Street’s legions of lobbyists and lawyers. They have been charitably handed millions of billable hours that will continue for endless years.
According to the Federal Register, it has received 328 final or proposed rules related to Dodd-Frank in the past year. Dodd-Frank was signed into law on July 21, 2010. It’s now December 11, 2013. The Volcker Rule that was “approved” yesterday is not set to take full effect until July 21, 2015. That’s five years after the original Dodd-Frank legislation was passed and almost seven years after Wall Street crashed the financial system and the U.S. economy. But the authors of the Volcker Rule have one more caveat about when it might actually take full effect. The rule says: “The Board will continue to monitor developments to determine whether additional extensions of the conformance period are in the public interest, consistent with the statute.” This is the same as waving a flag and saying, “lobbyists, rev up your engines…”
In a fashion similar to the parent of a serially truant child who needs a handwritten note from his enabling parent to explain his absence from school and homework, the Federal Reserve Board of Governors released this statement yesterday explaining why the Volcker Rule won’t take effect until 2015, and maybe not even then:
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