What will happen to FDIC’s $600 billion?
According to the Wall Street Journal, on Tuesday, August 20, the FDIC. reformed the Volcker rule, named after former Federal Reserve Board Chairman Paul Volcker.
Section 619 of the 2010 Dodd – Frank Law, known as the Volcker Rule basically says: ” Don’t trade with depositors money.”
What happened on Tuesday, Aug. 20, is that 4 FDIC. members by a vote of 3-1 decided to relax the Volcker Rule.
This means that half of the FDIC.’s reserve or $600 billion will be available for speculation with no policing or S.E.C. involvement watching the speculators.
The one descending vote by Martin Gruenberg stated: “The Volcker Rule will no longer impose a meaningful constraint on speculative and proprietary trading by banks and by bank holdings companies benefiting from the public safety net”.
Why did the FDIC relax these rules that insures depositor’s accounts up to $250,000? How much did they pay 3 of the 4 members to vote in favor of Wall Street instead of depositors? I can only imagine what will become of the $600 billion when the next recession takes place, and the only variable of that happening is when not if!
Randy Warnick
Smock