Last week, CNN International's Felicia Taylor invited Roosevelt Institute Fellow Mike Konczal for a night of poker, pizza, and beer. But this wasn't your typical card game -- it was actually a lesson on what the Volcker Rule is and why we need to ban proprietary trading. In the video below, watch Mike and other experts explain how letting banks gamble with their own money leaves all of us on the hook when they're dealt a bad hand.
Mike says that the Volcker Rule would draw a bright line between the banks' own reserves, which it wouldn't be allowed to bet with, and its clients' money, which "can be used with adequate permission to go and gamble in the financial markets." Why the need for this distinction? Mike explains that "when you're betting with your own money, as we see with poker and as we see with any other gambling game, sometimes you lose big. You lose big very quickly out of nowhere, and those kind of immediate collapses out of nowhere cause panics, cause contagion." And once the downward spiral begins, it's not just the banks that suffer -- it's the American taxpayers who are forced to step in and cover their losses.
For more, check out Mike's explainer on the Volcker Rule at The Nation.