Wall Street About To Be Hit With A Rule It Hates, Thanks To JPMorgan
http://www.huffingtonpost.com/2013/12/05/volcker-rule-jpmorgan_n_4391024.html Due 16 Dec 2013. What is the Volcker Rule? What is portfolio hedging? Should banks be allowed to hedge their portfolios?? Why or why not??
The Volcker Rule is part of the Dodd–Frank Financial-reform Act and trading restrictions placed on financial institutions. According to the article, in another words, it is when banks are prohibited from "gambling with their own money." Portfolio hedging is proprietary trading by another name; it is a variety of techniques that banks used to reduce risk exposure in an investment portfolio. Yes, banks should be allowed to hedge their portfolios. As stated in the article : "Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis. At the end of the day, they'll be the ones responsible for their actions.
Accoding to the article the Volcker Rule is part of the Dodd-Frank Financial-reform act, which prohibits banks from proprietary trading, which is considered as fancy talk for "gambling with their own money". Porfolio hedging is basically proprietery trading by another name; banks use it to claim that any kind of trading they do is hedging against losses somewhere in an investment portfolio. No, banks should not be allowed to hedge their portfolios, because banks are "not so great at trading", which would be a disadvantage for the bank or "anyone" whose involved in the process.
The Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading i.e. gambling. Portfolio hedging is another name for proprietary trading. With the other name, it "lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios". As much as this is a bad idea to let banks gamble away their cash, allowing them to do so will give them responsibility. They will yearn to make a profit and be aware of what they are doing with their cash at all times.
"The Volcker Rule" is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which is fancy talk for "gambling with their own money." According to the article, "portfolio hedging" is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. No, banks should not allowed to hedge their portfolios because every time they do there's always a failure. Banks keeps losing millions of dollars or being at war to each other.
The Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading i.e. gambling.Porfolio hedging is basically proprietery trading by another name; banks use it to claim that any kind of trading they do is hedging against losses somewhere in an investment portfolio."Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis.
The Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means"gambling with their own money." Portfolio hedging is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes.
The "Volcker Rule," is a low that prevents banks from "gambling with their own money." "Portfolio hedging" is a big loophole in the Volcker Rule. It is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should be allowed to hedge their portfolios because it helps them prevent losses which keeps them from failing. Though it is sometimes used irresponsibly like what happened with JP Morgan, when used responsible it helps banks which in return helps the economy as a whole. According to the article without it big banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks.
The Volcker Rule is a part of the Dodd Frank financial reform act that prohibits banks from proprietary trading, or in other words gambling. Portfolio hedging is a loophole that was left by regulators to allow banks to still invest in proprietary trading, but in another name. Banks shouldn't be allowed to hedge their portfolios because they will continue to not loan money to people and invest in risky stocks. It will prevent failures like the London Whale debacle by JPMorgan and others that could have happened. They will have to be more careful with what they do then which will teach them to not take part in such risky maneuvers.
The Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading, as in gambling. Portfolio hedging is the same as proprietary trading. Under this name, banks are allowed to say that any trading they do is to hedge against losses in their portfolios. Although gambling is never a good idea when it comes to these large banks, they are the ones that will have to pay for their losses in the end. They could end up making a huge profit, and they are also keeping track of their money.
The Volcker rules is part of Dodd-Frank financial reform act that prohibits banks from proprietary trading or basically gambling. Portfolio hedging is a bypass to financial reform act left by regulators so that banks can invest into proprietary trading, but reworded to sound okay. Banks shouldn't be allowed to this because its not helping economy in anyway, actually hurting it. because banks won't lend out money to people, but rather invest the money instead. This is putting a hold on the US economy that can create serious consequences for the future.
The Volcker Rule prohibits banks from proprietary trading, which is fancy talk for gambling with their own money. portfolio hedging is proprietary trading by another name, because it lets banks claim that any kind of trading. No I don't think that such big banks should take that big risk, the banks may end up losing a lot of money like JP Morgan who lost 6 Billion dollars that is no pocket change to simply lose and to affect Wall Street.
The "Vlocker Rule" stops banks from proprietary trading or gambling with their own money, that's part of Dodd-Frank financial reform act. Portfolio hedging is a loophole in the Vlocker Rule, its proprietary trading. Banks shouldn't be able to put their stocks at risk like this, and it's not even helping the economy, its more or less hurting it. JP Morgan lost billions from this. By doing this, its putting a hold on the economy and it is going to potentially hurt us in the future. According to the article, this rule helps protect the banks from hurting themselves in the future.
The Volcker Rule is a part of the Dodd-Frank financial-reform act, which prohibit banks from proprietary trading, such as gambling. Portfolio hedging is basically proprietary trading by another name which lets banks claim any kind of trading. Banks shouldn't be allowed to hedge their portfolios because they can face a huge loss and will be terrible for our economy.
The Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means"gambling with their own money." Portfolio hedging is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes.
The Volcker Rule is a financial-reform act, that prohibits banks from proprietary trading, which is gambling. The portfolio hedging is a big loophole in the Volcker Rule, in which it is proprietary trading by another name. This allows banks claim that any kind of trading they do is hedging against losses somewhere in their portfolios. The banks should not be allowed to hedge their portfolio, because they are gambling with their own money. The banks are taking a risk on letting another case of the "London Whale" debacle to happen. The banks should learn from what happen to JPMorgan .
The Volcker rule is part of the Dodd-Frank financial-reform act. It prohibits banks from proprietary trading, in order words gambling. Portfolio hedging is basically another name for proprietary trading. Banks should not be allowed to hedge their portfolios because it is too risky and can result in failure and huge losses. Applying a tough Volcker rule would actually have a positive outcome because it makes banks act more responsibly and take less risks. Also, it protects banks from future failures from gambling, which is generally something they are not good at.
The Volcker Rule is a financial-reform act, that prohibits banks from proprietary trading, which is gambling. Portfolio hedging is basically another name for proprietary trading. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes. The banks are taking a risk on letting another case of the "London Whale" debacle to happen. The banks should learn from what happen to JPMorgan .
The Volcker Rule is a part of the Dodd-Frank financial-reform act. This act keeps banks from gambling (trading proprietaries). Portfolio trading is just another name for proprietary trading.Allowing banks to do this would put more money at risk and lead to a chance of losing a lot of money. in my opinion, allowing banks to participate in portfolio trading is bad and shouldn't be done.
The Volcker Rule is part of the Dodd–Frank Financial-reform Act and trading restrictions placed on financial institutions. According to the article, in another words, it is when banks are prohibited from "gambling with their own money." Portfolio hedging is proprietary trading by another name; it is a variety of techniques that banks used to reduce risk exposure in an investment portfolio. Yes, banks should be allowed to hedge their portfolios. Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis.
The "Volcker Rule," which is part of the Dodd-Frank financial-reform act, prohibits banks from proprietary trading. Which means that they can not gamble basically. On the other hand, portfolio hedging is what people call proprietary trading. This allows banks claim that any kind of trading they do is hedging against losses somewhere in their portfolios. Banks shouldn't be allowed to hedge their portfolios because one, they're gambling with their own money. Two, they would be trading stocks and bonds just for their own profit. And lastly, it would raise stock prices and overall become a negative impact on our economy.
The Volcker Rule is a part of the Dodd-Frank financial-reform act. This rule stops banks from gambling with its money on risky investments. Portfolio hedging is another name used as a loophole for proprietary trading or gambling with money. Banks should not be allowed to hedge their portfolios because it can cause significant damage to both banks and to the economy in total. The "London Whale" is a prime example of this as it causes JP Morgan to lose an abundance of money. Furthermore, this Volcker Rule should stop the risky investments as it is a very strict rule on not allowing banks to make risky investments coming after JP Morgans "London Whale."
The Volcker Rule is a part of the Dodd-Frank financial reform act. It stops banks from doing such things like gambling. Portfolio hedging is also known as proprietary trading and this act prevents banks from doing that. Banks should not allow to hedge their portfolios because banks are not the best at trading which would be bad for the bank or anyone else. It is also not a good idea to allow banks to gamble their cash. It is also dangerous for the overall economy.
he Volcker Rule is a part of the Dodd-Frank financial-reform act. This rule stops banks from gambling with its money on risky investments. Portfolio hedging is basically proprietary trading by another name which lets banks claim any kind of trading. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. It is only hurting the economy, so therefore banks should not.
The Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means gambling with their own money. Portfolio hedging is another name for proprietary trading, because it lets banks claim that any kind of trading they do is hedging against losses. Banks should not be allowed to hedge their portfolios. A prime example is the recent, most dramatic portfolio hedging FAIL, the “London Whale,” where the bank lost more than 6 billion dollars. The banks should definitely stop gambling their money and loan it to people who need the money and stop holding up the economy. The Volcker Rule will actually help the bank in the future and help them to remember no bank is Too Big To Fail.
The Volcker rule will prevent banks from gambling with money that isn't theirs. Portfolio hedging is property trading. Banks should not be allowed to do this because business practices like these are the reason banks are so powerful. With the Volcker rule banks will have to return to being banks and loan money to people with would help regulate and restore our economy.
The Volcker rule prevents banks from proprietary trading which is basically gambling. Portfolio hedging is another way to say proprietary trading, it lets banks claim that any kind of trading they do is hedging against losses. I think banks should be allowed to hedge their portfolios. If they do well hedging, they make a large sum of money and if they fail and lose a lot, the government would just help them out since they're probably "Too big to fail." To banks there is no reason not to gamble their money away.
The Volcker rule is a rule proposed by Paul Volcker to restrict United States banks from making investments that do not benefit their customers. Portfolio hedging is a technique used to reduce risk exposure in an investment portfolio. I believe that banks should not be allowed to hedge their portfolios. losing the type of money like they did with the "london whale" debacle is a very serious issue and if you can ever lose money like they you should never take the risk. that money can be used for other things like creating jobs and helping the homeless. its only making our economy have more issues. sure it may be able to reduce some risk and the government can and will always bail them out since theyre "too big to fail" but its not worth the risk. All in all, portfolio hedging may help but is only gonna cause more and more issues.
The Volker is a type of rule in which prevents banks from trading. This rule was created by Paul Volker. Portfolio hedging is basically the same term as proprietary trading.I believe that it's not a good idea to for banks to hedge/trade their portfolios. Because, it creates the potential for a lot of money to be lost. The money should money should go elsewhere to benefit for other things that are much more important. Sure, portfolio hedging is kinda of a good idea but its too much of a gamble. It should be shifted elsewhere to benefit another system.
The Volcker Rule is part of the Dodd–Frank Financial-reform Act and trading restrictions placed on financial institutions. According to the article, in another words, it is when banks are prohibited from "gambling with their own money." Portfolio hedging is proprietary trading by another name; it is a variety of techniques that banks used to reduce risk exposure in an investment portfolio. Yes, banks should be allowed to hedge their portfolios. As stated in the article : "Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis. At the end of the day, they'll be the ones responsible for their actions.
ReplyDeleteAccoding to the article the Volcker Rule is part of the Dodd-Frank Financial-reform act, which prohibits banks from proprietary trading, which is considered as fancy talk for "gambling with their own money". Porfolio hedging is basically proprietery trading by another name; banks use it to claim that any kind of trading they do is hedging against losses somewhere in an investment portfolio. No, banks should not be allowed to hedge their portfolios, because banks are "not so great at trading", which would be a disadvantage for the bank or "anyone" whose involved in the process.
DeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading i.e. gambling. Portfolio hedging is another name for proprietary trading. With the other name, it "lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios". As much as this is a bad idea to let banks gamble away their cash, allowing them to do so will give them responsibility. They will yearn to make a profit and be aware of what they are doing with their cash at all times.
ReplyDelete"The Volcker Rule" is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which is fancy talk for "gambling with their own money." According to the article, "portfolio hedging" is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. No, banks should not allowed to hedge their portfolios because every time they do there's always a failure. Banks keeps losing millions of dollars or being at war to each other.
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading i.e. gambling.Porfolio hedging is basically proprietery trading by another name; banks use it to claim that any kind of trading they do is hedging against losses somewhere in an investment portfolio."Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis.
ReplyDeleteThe Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means"gambling with their own money." Portfolio hedging is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes.
ReplyDeleteThe "Volcker Rule," is a low that prevents banks from "gambling with their own money." "Portfolio hedging" is a big loophole in the Volcker Rule. It is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should be allowed to hedge their portfolios because it helps them prevent losses which keeps them from failing. Though it is sometimes used irresponsibly like what happened with JP Morgan, when used responsible it helps banks which in return helps the economy as a whole. According to the article without it big banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks.
ReplyDeleteThe Volcker Rule is a part of the Dodd Frank financial reform act that prohibits banks from proprietary trading, or in other words gambling. Portfolio hedging is a loophole that was left by regulators to allow banks to still invest in proprietary trading, but in another name. Banks shouldn't be allowed to hedge their portfolios because they will continue to not loan money to people and invest in risky stocks. It will prevent failures like the London Whale debacle by JPMorgan and others that could have happened. They will have to be more careful with what they do then which will teach them to not take part in such risky maneuvers.
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act that stops banks from proprietary trading, as in gambling. Portfolio hedging is the same as proprietary trading. Under this name, banks are allowed to say that any trading they do is to hedge against losses in their portfolios. Although gambling is never a good idea when it comes to these large banks, they are the ones that will have to pay for their losses in the end. They could end up making a huge profit, and they are also keeping track of their money.
ReplyDeleteThe Volcker rules is part of Dodd-Frank financial reform act that prohibits banks from proprietary trading or basically gambling. Portfolio hedging is a bypass to financial reform act left by regulators so that banks can invest into proprietary trading, but reworded to sound okay. Banks shouldn't be allowed to this because its not helping economy in anyway, actually hurting it. because banks won't lend out money to people, but rather invest the money instead. This is putting a hold on the US economy that can create serious consequences for the future.
ReplyDeleteThe Volcker Rule prohibits banks from proprietary trading, which is fancy talk for gambling with their own money. portfolio hedging is proprietary trading by another name, because it lets banks claim that any kind of trading. No I don't think that such big banks should take that big risk, the banks may end up losing a lot of money like JP Morgan who lost 6 Billion dollars that is no pocket change to simply lose and to affect Wall Street.
ReplyDeleteThe "Vlocker Rule" stops banks from proprietary trading or gambling with their own money, that's part of Dodd-Frank financial reform act. Portfolio hedging is a loophole in the Vlocker Rule, its proprietary trading. Banks shouldn't be able to put their stocks at risk like this, and it's not even helping the economy, its more or less hurting it. JP Morgan lost billions from this. By doing this, its putting a hold on the economy and it is going to potentially hurt us in the future. According to the article, this rule helps protect the banks from hurting themselves in the future.
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act, which prohibit banks from proprietary trading, such as gambling. Portfolio hedging is basically proprietary trading by another name which lets banks claim any kind of trading. Banks shouldn't be allowed to hedge their portfolios because they can face a huge loss and will be terrible for our economy.
ReplyDeleteThe Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means"gambling with their own money." Portfolio hedging is basically proprietary trading by another name, because it lets banks claim that any kind of trading they do is hedging against losses somewhere in their massive, multi-trillion-dollar portfolios. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes.
ReplyDeleteThe Volcker Rule is a financial-reform act, that prohibits banks from proprietary trading, which is gambling. The portfolio hedging is a big loophole in the Volcker Rule, in which it is proprietary trading by another name. This allows banks claim that any kind of trading they do is hedging against losses somewhere in their portfolios. The banks should not be allowed to hedge their portfolio, because they are gambling with their own money. The banks are taking a risk on letting another case of the "London Whale" debacle to happen. The banks should learn from what happen to JPMorgan .
ReplyDeleteThe Volcker rule is part of the Dodd-Frank financial-reform act. It prohibits banks from proprietary trading, in order words gambling. Portfolio hedging is basically another name for proprietary trading. Banks should not be allowed to hedge their portfolios because it is too risky and can result in failure and huge losses. Applying a tough Volcker rule would actually have a positive outcome because it makes banks act more responsibly and take less risks. Also, it protects banks from future failures from gambling, which is generally something they are not good at.
ReplyDeleteThe Volcker Rule is a financial-reform act, that prohibits banks from proprietary trading, which is gambling. Portfolio hedging is basically another name for proprietary trading. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. They could artificially inflate the stock market, which could lead to sharp up and down spikes. The banks are taking a risk on letting another case of the "London Whale" debacle to happen. The banks should learn from what happen to JPMorgan .
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act. This act keeps banks from gambling (trading proprietaries). Portfolio trading is just another name for proprietary trading.Allowing banks to do this would put more money at risk and lead to a chance of losing a lot of money. in my opinion, allowing banks to participate in portfolio trading is bad and shouldn't be done.
ReplyDeleteThe Volcker Rule is part of the Dodd–Frank Financial-reform Act and trading restrictions placed on financial institutions. According to the article, in another words, it is when banks are prohibited from "gambling with their own money." Portfolio hedging is proprietary trading by another name; it is a variety of techniques that banks used to reduce risk exposure in an investment portfolio. Yes, banks should be allowed to hedge their portfolios. Bankers warn that this version of the Volcker Rule means ginormous banks will not be able to protect themselves from future economic calamities, which means they have no choice but to get smaller and take fewer risks." I think if banks hedge their portfolios, they might actually prevent bankruptcies and other economic crisis.
ReplyDeleteThe "Volcker Rule," which is part of the Dodd-Frank financial-reform act, prohibits banks from proprietary trading. Which means that they can not gamble basically. On the other hand, portfolio hedging is what people call proprietary trading. This allows banks claim that any kind of trading they do is hedging against losses somewhere in their portfolios. Banks shouldn't be allowed to hedge their portfolios because one, they're gambling with their own money. Two, they would be trading stocks and bonds just for their own profit. And lastly, it would raise stock prices and overall become a negative impact on our economy.
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial-reform act. This rule stops banks from gambling with its money on risky investments. Portfolio hedging is another name used as a loophole for proprietary trading or gambling with money. Banks should not be allowed to hedge their portfolios because it can cause significant damage to both banks and to the economy in total. The "London Whale" is a prime example of this as it causes JP Morgan to lose an abundance of money. Furthermore, this Volcker Rule should stop the risky investments as it is a very strict rule on not allowing banks to make risky investments coming after JP Morgans "London Whale."
ReplyDeleteThe Volcker Rule is a part of the Dodd-Frank financial reform act. It stops banks from doing such things like gambling. Portfolio hedging is also known as proprietary trading and this act prevents banks from doing that. Banks should not allow to hedge their portfolios because banks are not the best at trading which would be bad for the bank or anyone else. It is also not a good idea to allow banks to gamble their cash. It is also dangerous for the overall economy.
ReplyDeleteThis comment has been removed by the author.
ReplyDeletehe Volcker Rule is a part of the Dodd-Frank financial-reform act. This rule stops banks from gambling with its money on risky investments. Portfolio hedging is basically proprietary trading by another name which lets banks claim any kind of trading. Banks should not be allowed to hedge their portfolios because it is dangerous for the over all economy. It is only hurting the economy, so therefore banks should not.
ReplyDeleteThe Volcker Rule is part of the Dodd-Frank financial-reform act, which prohibits banks from proprietary trading, which means gambling with their own money. Portfolio hedging is another name for proprietary trading, because it lets banks claim that any kind of trading they do is hedging against losses. Banks should not be allowed to hedge their portfolios. A prime example is the recent, most dramatic portfolio hedging FAIL, the “London Whale,” where the bank lost more than 6 billion dollars. The banks should definitely stop gambling their money and loan it to people who need the money and stop holding up the economy. The Volcker Rule will actually help the bank in the future and help them to remember no bank is Too Big To Fail.
ReplyDeleteThe Volcker rule will prevent banks from gambling with money that isn't theirs. Portfolio hedging is property trading. Banks should not be allowed to do this because business practices like these are the reason banks are so powerful. With the Volcker rule banks will have to return to being banks and loan money to people with would help regulate and restore our economy.
ReplyDeleteThe Volcker rule prevents banks from proprietary trading which is basically gambling. Portfolio hedging is another way to say proprietary trading, it lets banks claim that any kind of trading they do is hedging against losses. I think banks should be allowed to hedge their portfolios. If they do well hedging, they make a large sum of money and if they fail and lose a lot, the government would just help them out since they're probably "Too big to fail." To banks there is no reason not to gamble their money away.
ReplyDeleteThe Volcker rule is a rule proposed by Paul Volcker to restrict United States banks from making investments that do not benefit their customers. Portfolio hedging is a technique used to reduce risk exposure in an investment portfolio. I believe that banks should not be allowed to hedge their portfolios. losing the type of money like they did with the "london whale" debacle is a very serious issue and if you can ever lose money like they you should never take the risk. that money can be used for other things like creating jobs and helping the homeless. its only making our economy have more issues. sure it may be able to reduce some risk and the government can and will always bail them out since theyre "too big to fail" but its not worth the risk. All in all, portfolio hedging may help but is only gonna cause more and more issues.
ReplyDeleteThe Volker is a type of rule in which prevents banks from trading. This rule was created by Paul Volker. Portfolio hedging is basically the same term as proprietary trading.I believe that it's not a good idea to for banks to hedge/trade their portfolios. Because, it creates the potential for a lot of money to be lost. The money should money should go elsewhere to benefit for other things that are much more important. Sure, portfolio hedging is kinda of a good idea but its too much of a gamble. It should be shifted elsewhere to benefit another system.
ReplyDelete