Former U.S. Treasury Secretaries Endorse Volcker Rule in WSJ
Five former U.S. Treasury secretaries who have served both Republican and Democrat presidents have jointly called on Congress to implement the so- called Volcker Rule to limit the size and trading of banks.
Banks that benefit from public support via access to the Federal Reserve and the Federal Deposit Insurance Corp. shouldn’t “engage in essentially speculative activity unrelated to essential bank services,” John Snow, Paul O’Neill, Nicholas Brady, George Shultz and W. Michael Blumenthal wrote in a letter published by the Wall Street Journal.
Restricting proprietary trading by banks is a “key element in protecting our financial system and will assure that banks will give priority to their essential lending and depository responsibilities,” the former secretaries wrote.
The group also urged the U.S. government to take the lead at international meetings to win “broad agreement on this principle among the leading financial centers.”
U.S. President Barack Obama on Jan. 21 introduced a proposal he called the Volcker Rule to limit the size and trading activities of financial institutions and reduce risk- taking. The rule is named after former Fed Chairman Paul Volcker.