Wednesday, October 21, 2009

Paul Volcker Is Spot On. Ban Derivatives And Risky Schemes From Institutions Entrusted With Protecting Society's Savings

“The banks are there to serve the public,” Mr. Volcker said, “and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties” and ultimately fails.

We rambled and ranted incessantly on here about the conflicts of interest and the coming doom of our banking system before this crisis developed. Since then, we have stated explicitly that derivatives and gambling with society's money need to be banned from our banking system. Period. Mr. Volcker is spot on. The only reason these reforms are not being considered is because of corruption. That's it. It's not about morality or virtue or democracy or concern for the common good. You remember the common good? It's explicitly stated in our Constitution.
posted by TimingLogic at 2:07 PM