Former Federal Reserve Chairman Paul Volcker is disappointed with the recently released draft of the Volcker rule, saying it is too complex.
“I don’t like it, but there it is,” Vocker said, ThinkProgress.org reports. “I’d write a much simpler bill. I’d love to see a four-page bill that bans proprietary trading and makes the board and chief executive responsible for compliance. And I’d have strong regulators. If the banks didn’t comply with the spirit of the bill, they’d go after them.”
The original intent of the rule was to prevent banks from making risky investments with funds that are tied to the federal government.
Former Sen. Ted Kaufman (D-Del.) said the weakness in the rule stems from including the word “exemption.”
“Let me tell you, as soon as you see that, it’s pronounced ‘loophole,’” Kaufman said, according to ThinkProgress.org. “That’s what it means in English.”
Liberals have accused Sen. Scott Brown (R-Mass.) of watering down the rule before regulators even had a chance to draft it by inserting an exemption that allowed banks to resume investing money in risky hedge funds and private equity firms.
Brown involved himself in the rule’s negotiations last year in order to prevent a ban on proprietary trading that would sweep Massachusetts companies like Fidelity and Mass Mutual, TheHill.com reports.