Money breeds greed
J.P. Morgan executives along with regulators testified recently about the London Whale Scandal that cost the company more than $6 billion. In essence, the company engaged in risky trading with its depositors’ money and hid the losses from regulators.
Yet, these same companies through aggressive lobbying efforts argue that they don’t need to be regulated. The Republican Party platform insists that regulation is a bad for business.
In this instance, regulation would have helped J.P. Morgan to avoid losses. I don’t advocate for over-regulation, but neither do I want zero regulation.
In any business that deals with large sums of other people’s money, we should have rules that are enforced strictly because money breeds greed.
One of these rules is the Volcker Rule, which bans proprietary trading — risky securities bets that banks place for their own accounts, rather than for their clients.
It’s designed to ensure that government perks that banks enjoy — borrowing money at low rates from the Federal Reserve, guaranteeing their depositors against losses — do not subsidize risky speculation.
Rep. John Campbell, R-Calif., has proposed legislation to eliminate this rule in exchange for some banks being broken up based on exceeding a credit-risk measurement, but this is a bad trade. Big banks would be setting up their own rules again.
Tell your Congressman Burgess to support Dodd-Frank and the Volcker Rule to protect our money.