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After more than three years and some 18,000 comments from interested parties, the financial sector’s major regulatory agencies are locked in battle over how best to implement the Volcker Rule. We wholeheartedly support the Volcker Rule, but fear that regulators are making the proposed regulations more complex than necessary or appropriate.

The Volcker Rule, which is part of the Dodd-Frank financial reform law, is intended to impose strict limits on banks engaging in “proprietary trading” – i.e., betting the bank’s capital by significant speculative trading in financial instruments. Congress, as usual, gave general direction to the regulators to figure out how to implement the concept.

The regulators’ proposed rulemaking on the Volcker Rule is a whopping 298 pages of complexity that is not only difficult to understand but nearly impossible to monitor and regulate. There is a better way, as we suggested in a previous BankThink post. We believe the time is right for regulators to take a more holistic view of the issues.

Here is the link to the full article

The Federal Reserve’s quantitative easing program is not working and causes confusion, according to William Isaac, former head of the FDIC and senior managing director of FTI Consulting.

The decision announced by the Fed not to taper the program was “quite surprising, almost stunning,” Isaac told Newsmax TV in an exclusive interview.

“[QE is] taking money away that would be going to retirees or people close to retirement, making it very difficult for them to make spending decisions. It’s creating great uncertainty in the business community. Loan demand has flattened at all of the major banks in the past month or two. We don’t know what the future is.”

Here is the link to the full article

I’ve listened to and read virtually every point of view for and against a military attack by the U.S. against Syria, and I’m disappointed in the quality and focus of the debate. Too much media attention is given to the politics of who is up or down, as if this tragic and dangerous situation is the equivalent of a Beltway football game.

I oppose a military attack for reasons I will get into, but before I do let me explain my unique perspective. Many know me as a financial and regulatory expert who served as Chairman of the FDIC during the bank and S&L crises of the 1980s. People from my hometown know my paternal grandparents immigrated to Bryan, Ohio from Syria in the 1890s, likely to escape religious persecution as Christians (my maternal grandparents emigrated from Sweden so I’m an unusual ethnic mix).

Here is the link to the full article