From Reuters: Banks that trade for their own accounts should
not benefit from the implicit backing of taxpayers, and Wall Street's
opposition to new rules curbing such activities is unfounded, a top Federal
Reserve official said on Monday.
Federal Reserve Governor Sarah Raskin, a former Maryland
financial regulator, said the notion that derivatives markets enhance firms'
ability to raise capital was questionable.
"I view proprietary trading as an activity of low or no
real economic value that should not be part of any banking model that has an
implicit government backstop," Raskin told students at the Graduate School
of Banking at Colorado in remarks made available in Washington. "Much of this so-called liquidity,
especially in opaque over-the-counter markets, is potentially illusory and
destabilizing, especially during adverse market conditions, which does not
benefit the public….."
Wait…wait…there’s more at http://www.reuters.com/article/2012/07/23/us-usa-fed-rasking-idUSBRE86M1FB20120723
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