Soros on Volcker Rule: “I Back It”
Billionaire investor George Soros says maybe there might be something to the notion that the banking “oligopoly” formed by the four largest banks in the U.S. needs to be broken up. The so-called Volcker rule, named after Obama adviser and former Chairman of the Federal Reserve Paul Volcker, proposes, among other things, to limit the growth of commercial banks through merger and acquisition, in addition to banning banks from owning and investing in hedge funds and forbidding them from engaging in proprietary trading. The aim of these restrictions is to limit the financial system’s exposure to what many view as excessive risk taking by big commercial banks.
According to a BusinessWeek.com report, Soros said earlier this week at a London event that he was in favor of the Volcker rule.
The article went on to say that financials accounted for 6.6 percent of Soros Fund Management LLC’s stock holdings during the fourth quarter, according to a regulatory filing. Citigroup Inc., one of the large banks likely to be affected if the Volcker rule is passed, was the hedge fund’s fifth-largest stake as of Dec. 31, with 94.7 million shares. Currently, Soros Fund Management has about $25 billion in assets.
Although the Volcker rule is not written into the House bill that was passed, the Senate’s banking panel approved Sen. Christopher Dodd’s financial-rules overhaul, furthering the Obama administration’s efforts to accomplish the largest restructuring of Wall Street in nearly seven decades, according to BusinessWeek. The bill itself would create a consumer protection bureau at the Federal Reserve, if passed, in addition implementing the Volcker rule and establishing a mechanism that enables the government to dismantle failed firms that threaten the financial system.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Loading ...