Bankers Say Clarification of CDOs Under Volcker Falls Short

Mark Williams, School of Management

U.S. banking regulators provided advice on how banks should treat certain securities in a document quickly panned by industry groups for failing to address their concerns that the newly finalized Volcker Rule will force banks to take losses on the securities…

Expert quote:

“These instruments were enthusiastically embraced with the hopes of gaining generous tax treatment. One lesson learned from the recent financial crisis is that bankers need to be held accountable for their decision-making. When decisions go well, bankers expect to collect a profit, and on the downside they should also expect to pay a cost.”

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