Volcker: Reinstate Glass Steagall
Via The Big Picture
His written statement advises against a return to “business as usual,” and makes specific recommendations as to what to do to avoid another meltdown. *
1. Reaffirm the principle separating banking from commerce as our approach to financial regulation;
2. Regulate Derivatives as a typical financial product;
3. Encourage more prudent compensation practices;
4. Close existing loopholes that inevitably weaken prudential safeguards;
5. Register and establish reporting requirements for hedge funds and private equity;
Volcker also notes two other key needed elements in need of reform: the Moral Hazard of the bailouts, and the ongoing policy of “Too Big To Fail.”
Paul Volcker’s testimony to the US House of Representatives: http://www.house.gov/apps/list/hearing/financialsvcs_dem/volcker.pdf
