• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Volcker Says Goldman Can’t Have Its Cake and Eat It, Too

Paul Volcker, former Fed chair and current Economic Recovery Advisory Board chair, says that it’s time for Goldman Sachs to make a choice: Either it’s a bank or it’s not.

In the midst of the financial crisis, Goldman Sachs and Morgan Stanley sought licenses to become bank holding companies in order to gain access to the Fed’s emergency lending capacity. Despite the increased regulation and capital requirements, they’ve stayed “banks” while continuing to use their cash reserves in proprietary trades (i.e., investing their own money in the stock and other markets). Volcker’s proposed banking rules would end that practice, as it has the potential to drain banks reserves — and then the Fed’s reserves and, in the case of failure, the FDIC’s coffers as well.

Upon hearing that Goldman Sachs had no intention of giving up its banking license, Volcker said:

“The implications for Goldman Sachs or any other institution is, do you want to be a bank?” Volcker, a former chairman of the Federal Reserve, told the Financial Times. “If you don’t want to follow those (banking) rules, you want to go out and do a lot of proprietary stuff, fine, but don’t do it with a banking license.”

Goldman, as likely comes as no surprise, wants to go out and take risks with its money and use the Fed (and taxpayer dollars) to limit the risk that its bets are faulty. The problem is that Volcker knows full well that the last time Goldman had an absolute hedge against loss was when it convinced AIG to insure investments that were destined to go bad in order to profit off the insurance payout. He doesn’t think they should be able to do the same thing to the Federal Reserve.

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.