Word: firm
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Dates: during 2010-2019
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...held its second hearing in a week on President Obama's proposal to keep banks, which hold federally insured deposits, from engaging in such risky businesses as proprietary trading and hedge-fund and private-equity-fund investing (all three activities contain some element of trading or investing for the firm's own account, possibly employing leverage). Many have dismissed the so-called Volcker rule, which Obama named for former Federal Reserve chairman and current presidential adviser Paul Volcker (who has championed the proposal), as unnecessary. They say proprietary trading played a very limited role in causing the financial crisis, that...
...poured more than $3 billion into fixing its problems with structured investment vehicles, investments the bank set up with its own capital. Like Merrill, Citi lost big - as much as $15 billion, on the CDOs it decided to hold rather than sell off. In fact, nearly every large financial firm that stumbled during the financial crisis had billions of dollars in proprietary-trading or hedge-fund losses. (See the worst business deals...
...Proprietary trading played a big role in manufacturing the CDOs and other instruments that were at the heart of the financial crisis," says Michael Madden, a managing director of the investment firm BlackEagle Partners and a former Lehman executive. "If firms weren't able to buy up the parts of these deals that wouldn't sell ... the game would have stopped a lot sooner...
...Wall Street money manager Jeremy Grantham recently wrote shareholders that he thought the Volcker rule would eliminate conflicts of interest at financial firms. Citigroup's current chief executive Vikram Pandit, too, has said he believes banks need to start curtailing their riskier activities. In November, speaking to business students at Washington University in St. Louis, Mo., Pandit said that unlike with other financial crises, proprietary trading played a much bigger role than underwriting in the recent credit crunch that nearly brought down his firm. "It makes sense to me that you don't take deposits as an institution and turn...
Skeptics say it will be very hard to define which trades are being made on behalf of the firm and which are being made for clients. At issue as well is which firms would be subject to the Volcker rule. The skeptics say the Volcker rule wouldn't have stopped the collapse of Lehman or another investment bank, Bear Stearns, because they were not traditional banks. (Administration officials say the proposed rule would apply to any firm that owns a bank with federally insured deposits, which Lehman and Bear both did.) What's more, critics say, if you were...