United States – Federal Reserve Banking Deregulation

June 1, 2018

Federal Reserve Banking Deregulation 

Padmini Arhant

The Federal Reserve vote on banking deregulation two days ago renamed as Volcker 2.0 from the earlier one Volcker rule named after the ex-Federal Reserve Chairman Paul Volcker merits attention. 

The deregulation favoring major banks apparently with bipartisan support that includes a Democrat Lael Brainard among three sitting Fed Governors is claimed as simplification of the previous version. 

As such, Congress having blocked the rule that allowed consumers recourse against banks in addition to repealing fair lending practice in auto industry stated to have discriminated minority borrowers from white peers do not bode well in the economy comprising diverse consumer base.

The  Federal Reserve move towards new rule Volcker 2.0 cheered among  finance sector lobbyists in Wall Street and big banks having been responsible for financial crisis drowning significant number of homeowners and ordinary citizens in deep financial situations forcing bankruptcy and foreclosures on many beyond salvation requires public debate and approval rather than decision among core members representing vested interests.

The taxpayer insured banks and public deposits in financial institutions and importantly mortgage securities deserve scrutiny and regulatory compliance considering the banking industry earlier ventures and unrelenting activities that led to taxpayers bailout of the banks and finance institutions.

The ordinary taxpayers were abandoned in the mortgage fiasco while the big banks and hedge fund companies were rescued using the same taxpayers hard earned tax dollars in the do or die call following financial sector debacle. 

What has been recognized by common citizenry from past experience and established now is there will be no such thing as Bank or Insurance Industry Bailouts using taxpayer funds regardless of any dire scenarios sketched in the SOS – Too Big to Fail moment.

Though the new rule reported to retain the earlier version’s restrictions on speculative trading also known as proprietary trading, however providing classifications on trading activities for possible risk laden investments at banks discretion are to be weighed carefully given the finance industry’s notable impulsive characteristics for undesirable options. 

The article will resume highlighting other concerns related to Wall Street and Federal Reserve measures to ease regulations that are meant to protect ordinary citizens and common taxpayers being the overwhelming majority in the economy against the top 1% targeted goals to continue business as usual at the former expense.

Thank you.

Padmini Arhant

Author & Presenter PadmjniArhant.com



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