By Blu Putnam |
J.P. Morgan Chase's gambling losses keep going up. What was just a "manageable" $2 billion loss a few days ago is over $3 billion and could easily reach $5 billion or more. Yet, J.P. Morgan's loss can be our win if we seize this moment to make the outrageous Wall Street practice of betting other people's money illegal by implementing a strong Volcker Rule to rein in proprietary trading. Of course, J.P. Morgan Chase will keep calling the trades that led to its massive and sudden losses "hedging against risk," not proprietary trading, and so will other Wall Street bankers arrayed in phalanxes in Washington to delay and weaken the Volcker Rule and keep the Commodity Futures Trading Commission off the corporate crime beat. But these are some of the same people who insist that the 2008 financial collapse wasn't their fault. It's time for the Federal Reserve and other regulators to implement the strong Volcker Rule as intended by the former Fed chairman and Sens. Jeff Merkley and Carl Levin, its champions. J.P. Morgan was gambling, not hedging. Only a strong Volcker Rule will protect taxpayers, depositors, and our economy.
About Ed Mierzwinski Federal Consumer Program Director at the U.S. Public Interest Research Group
James Barth Co-author of 'Guardians of Finance: Making Regulators Work for Us'
David John Fellow at the Heritage Foundation
Elizabeth Warren Democratic Candidate for U.S. Senate
Alex Pollock Resident Fellow at the American Enterprise Institute.
Douglas Elliott Fellow in Economic Studies at The Brookings Institution