Banks Already Found Weasel Out Loophole to Obama’s New Curbs
January 22, 2010
(ChattahBox)—Well, it didn’t take the big banks long to find a way to weasel out of President Obama’s proposed new curbs on banks’ speculative investments. And bank insiders are even boasting about their crafty new schemes to retain the status quo and their risky hedge fund investments. The banks have latched on to the phrase in the proposed regulations, “operations unrelated to serving customers.” So, they plan to ensure that customers are allowed to invest in their hedge funds. Problem solved. What else yah got?
President Obama announced on Thursday, his new Volker Ruke,” which would seek to curb risky investments by banks.
According to the account by Business Insider:
“The president promised this morning to work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.”
But banks are already crowing that they can easily circumvent the new rules on hedge funds and that the regulations would only affect about 1 percent of its overall business.
Another scheme supposedly being considered by Goldman Sachs, would open up hedge funds to employees, thereby satisfying the requirement of customer involvement in bank investments.
They truly have no shame.
Photo Source: Driftglass