Bogle, Volcker Discuss State of U.S. Financial System
CFA Institute was honored to co-sponsor the John Bogle Legacy Forum at the Museum of American Finance in New York yesterday. The forum — which convened giants of the investment world from the last 50 years (including past SEC chairmen, a former chair and former vice chair of the Federal Reserve, and noted investors) — honored Bogle’s steadfast advocacy of investor interests, and discussed some of the pressing issues of the day confronting investors.
In a discussion of the so-called Volcker Rule to limit proprietary trading by banks, Vanguard founder Bogle opined that the proposed rules are better adopted as is rather than being scrapped, despite criticisms of their complexity. The rule’s namesake, former Federal Reserve Chairman Paul Volcker, cited the proliferation of special interests in Washington that have contributed to the complexity, and suggested that due emphasis be given to enforcement of the rules to properly support the intent of the law. View a video of the entire Bogle-Volcker discussion here.
Other panel discussions featured spirited conversations about the prospects for a uniform fiduciary standard for investment advice rendered in the U.S., the increased political pressure on capital markets and their regulators, and the continued advisability for investors to focus on relatively simple implementations of asset-allocation decisions.
Bloomberg Link, the Institute for the Fiduciary Standard, and the Museum of American Finance also sponsored the event.
If the institute’s purpose is to provide various views on the Volcker rule it is certainly succeeding but there comes a time when it should adopt a position and being with Bogle and Volcker is not a bad position to be in.I suggest that the rules be adopted with advisory enforcement for the 1st year in order to sort out the anbiguities that will arise and perhaps a sunset provision in 3 years so that a fresh look may be taken.That was essentailly done with the tick test for short sales and the result was not that bad.