Treasury Secretaries Back Volcker Rule

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Five former Treasury Secretaries, from Democratic and Republican administrations alike, voiced their support for the “Volcker Rule” on Sunday in a joint letter to the Wall Street Journal. The secretaries—Michael Blumenthal, Paul O’Neill, George Shultz, Nicholas Brady, and John Snow—said the rule, which would separate banks’ riskier trading operations like hedge funds from their more staid commercial banking duties—wrote that “Banks benefiting from public support by means of access to the Federal Reserve and FDIC insurance should not engage in essentially speculative activity unrelated to essential bank services.”

The former secretaries’ support adds momentum behind the proposed regulation, offered by former Federal Reserve chairman and Obama ally Paul Volcker, going into a week when the Senate, led by banking committee chair Sen. Chris Dodd (D-CT), plans to unveil its version of comprehensive financial reform. (The House’s version of financial reform, passed in December, gives the Treasury and the president the power to divest assets from banks if necessary.) Broadly speaking, the Volcker Rule is supported by Congressional Democrats involved in financial reform as well as many finance experts. Despite the massive amounts of speculation that fueled the economic meltdown, large financial institutions generally say they’re more than capable of policing their own risky trading operations, and don’t see the need to split those hedge funds and private equity funds from their rest of their company. We’ll see sometime this week whether Dodd and Sen. Bob Corker (R-TN), Dodd’s latest partner in financial-reform talks, decide to include the Volcker Rule in their plans.

 

DONALD TRUMP & DEMOCRACY

Mother Jones was founded to do journalism differently. We stand for justice and democracy. We reject false equivalence. We go after stories others don’t. We’re a nonprofit newsroom, because the kind of truth-telling investigations we do doesn’t happen under corporate ownership.

And we need your support like never before, to fight back against the existential threats American democracy faces. Fundraising for nonprofit media is always a challenge, and we need all hands on deck right now. We have no cushion; we leave it all on the field.

It’s reader support that enables Mother Jones to report the facts that are too difficult, expensive, or inconvenient for other news outlets to uncover. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

DONALD TRUMP & DEMOCRACY

Mother Jones was founded to do journalism differently. We stand for justice and democracy. We reject false equivalence. We go after stories others don’t. We’re a nonprofit newsroom, because the kind of truth-telling investigations we do doesn’t happen under corporate ownership.

And we need your support like never before, to fight back against the existential threats American democracy faces. Fundraising for nonprofit media is always a challenge, and we need all hands on deck right now. We have no cushion; we leave it all on the field.

It’s reader support that enables Mother Jones to report the facts that are too difficult, expensive, or inconvenient for other news outlets to uncover. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate