Also in this playlist...
This transcript is automatically generated
Thank you -- well this probably dead the most tangible effect yet we've seen from the JPMorgan trading blunder the Wall Street Journal reporting that in the days following the JPMorgan announcement about that two billion plus trading -- White House officials had been intense talks with the Treasury Department.
About a tougher stance on bank regulation the journal says the White House wants to be seeing champagne.
-- Wall Street regulation in this election year and does not want that both parole again on proprietary trading looking weak.
That news an election year plays right into our -- -- -- -- the deputy editor of the opinion page.
All of the Wall Street Journal not surprising -- and that do you think it has any material impact on the banks.
Only in the -- suppress economic activity more than it already -- I mean the first question I have -- -- is they want stronger stricter enforcement of the Volcker Rule.
What Volcker -- the original Volcker Rule it doesn't exist yet the regulators have not figured out how to define it or what it applies to.
And to exit suggests that you're going to make something stronger that doesn't exist and that the regulators have not themselves been able to define.
Is obviously a wholly a political act there is no economic content whatsoever.
Although in the make the banks worry.
That they'll be more uncertainty short term and what their operations which of their operations are going to be you legal and what the future might be deemed.
Illegal now the idea in me enough theory at least of separating some of these activities and not allowing clinical banks to trade.
You know their own money and which is I guess of the Volcker Rule.
Generally represents -- -- forget about the specifics for a moment -- You think that's a good idea after we want -- in a -- know what is a good idea is forbidding the banks to trade money that is so hopefully.
Protected by taxpayers which is the Federal Deposit Insurance Corp.
They shouldn't be playing with money that the taxpayers are backing up that was the whole point of the financial meltdown if they could somehow separate out that.
For -- up protected money.
From money that is wholly internal which seems to have been the case in the JPMorgan meltdown then I think you could have a workable rule but these.
Institutions are so big and so complex that it's very difficult to make those kinds of distinctions.
It's that -- raises the issue of if Jamie Dimon and the leadership at JPMorgan didn't have a handle on what's going on.
And how the -- how the regulators.
Going to handle it that's what I don't get it's like if you have the smartest guys all in banking.
Really failing to catch this early on then how -- the regulators do a better job.
They -- and you know as we -- know that regulators are often sitting inside these banks almost full time.
Watching them and even day -- donor aren't able to pick up on this like the SEC missed you know Bernie Madoff and when he was handed to them.
The regulators are just trip in.
For such vast swathes of the global market now that it's very difficult to simply insist that they do more and do Topper.
The answer is rationalizing some of these institutions so that there.
Maybe over an appropriate size that you can't get your arms around a meeting defection means of making the banks smaller or breaking up the banks is that -- you're anti matter that is front hinting at -- I don't know exactly what the process would be but I think back during the financial crisis when you -- institutions like Citi bank which clearly were in trouble.
But we're deemed too big to -- that was the moment when one of those banks should have been looked at heart in terms of breaking it up into smaller pieces we might get.
There again and I think that's going to be on the table -- You how does that play out on the campaign -- as yet Mitt Romney making some comments about -- and widely pointing out saying.
You have -- loss on one side that you have winners on the other side is -- trading they're going to zero sum game.
Well of course the White House is now running ads attacking Bain Capital and saying -- The promise -- vulture capitalist and they're defining him in that way.
Mitt Romney I think passed to speak up more about things like JPMorgan.
In the economic system and address the sort of things models just racing.
Whether these institutions should be made smaller so that they are more containable Romney is going to have to talk about those things at the moment.
He seems to be kind of pulling back from a tribal talked against in -- -- your interest -- to see you thank you guys.
Filter by section