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The Volcker Rule: Financial Crisis Bailouts and the Need for Financial Regulation Case Solution & Answer

In response to the potential collapse of major financial institutions in 2007, the U.S. government has pledged billions of dollars in loans, asset purchases, guarantees direct fiscal stimulus spending, expansionary monetary policy, and bailouts of several private financial institutions. Rescue operations have been particularly controversial because public money is used to protect private financial institutions and their leaders rich while ordinary citizens received such protection. One result of the government’s response has been the proposal to adopt the law on the Volcker Rule, which prohibits banks from participating in proprietary trading or trading on their own account, not their customers separate advantages. Transactions self expected to generate up to 10 percent of total commercial revenue, which exceeded $ 5.9 billion in 2010 for the six largest U.S. banks only. If the adoption of the Volcker rule, government agencies, including the Federal Reserve, the Securities and Exchange Commission, the FDIC and the Office of the Comptroller of the Currency, wrote a detailed regulation on? Practice Act. These organizations work but officials were executed for political officials with technical training. Upon issuance of a notice of proposed regulatory agencies may not solicit public comments, which help shape the regulations. The leaders of the major banks had to decide how to respond to this possible change in their business environment.
by
Dylan Minor,
Micola Persico
Source: Kellogg School of Management
5 pages.
Release Date: November 5, 2012. Prod #: KEL703-PDF-ENG
Volcker Rule: Financial crisis, bailouts, and the need for financial regulation Solution Case

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