Tell the CFTC: Don’t Let Big Banks Make Taxpayer-Backed Bets
The “Volcker Rule” is a part of the Dodd-Frank Wall Street reform bill that bans banks and other large, critical financial institutions from making risky, speculative bets using taxpayer backed funds – a practice called “proprietary trading.” Proprietary trading can be as simple as speculating on the direction of a stock or as involved as using computerized algorithms to bet on spreads between complex financial instruments.
Big banks have raked in billions on these risky bets. But when they bet and lost, we bailed them out.
In other words, system is rigged in favor of the big banks – heads they win, tails we lose.
“What I want to get out of the system is taxpayer support for speculative activities. And I want to look ahead. If you don’t bar that, it’s going to become bigger and bigger and it adds to what is already a risky business…The problem today is look ahead and try to anticipate the problems that may arise that will give rise to the next crisis. And I tell you, sure as I am sitting here, that if banking institutions are protected by the taxpayer and they are given free rein to speculate, I may not live long enough to see the crisis, but my soul is going to come back and haunt you.”
This is why it is so important that the Commodity Futures Trading Commission (CFTC) adopt a strong Volcker Rule. Your comment will be even more effective if it is in your own words. But we have also included a model comment below.
Click here to see Simon Johnson’s testimony to the House Financial Services Committee at a hearing entitled “Examining the Impact of the Volcker Rule on Markets, Businesses, Investors and Job Creation.”
Click here to view Gerald Epstein’s paper called “Proprietary Trading is a Bigger Deal Than Many Bankers and Pundits Claim.”
Click here to view AFR’s press statement on the regulators initial proposal on implementing the “Volcker Rule.”
For more information:
Here’s How You Can Help:
Please submit a comment to the CFTC here.
- Fill out the required fields, including the “validation code”.
- Copy and paste the following text into the body of your email, or edit the text to your own preference:
I’m writing in support of a strong “Volcker Rule.” My family and I were affected by the economic collapse of 2008, and we don’t want it to happen again. We need you to write a final rule that accomplishes the fundamental goals of the law: separating risky proprietary trading from the traditional business functions of banking institutions, banning proprietary trading at “too big to fail” banks, reducing the risk that financial market gambles present to the safety of our whole financial system, and stopping conflicts of interest like those that saw Wall Street firms selling their customers deals they had designed to fail.
It is important to not let the rule be undermined by exemptions or exceptions. The Dodd Frank Act instructs you to make sure that the activities big banks are permitted to engage in do not create the risk of another financial crisis. Accomplishing this requires changes to current business practices on Wall Street. I urge you not to be swayed by financial industry interest in protecting a status quo that has benefited them and put the rest of us at risk.
It is also important that banks that break the rules should face real penalties for violations. Violations of the “Volcker Rule” will endanger the stability of our financial system. They should not be treated lightly.
Thank you for considering my views.
Tags: Volcker Rule, Wall Street lobbying