Does Anyone feel like Bailing

The kind of reform I've been advocating is acceptance of the fact that the core of the system remains commercial banking. If that breaks down then you have an enormous crisis. And commercial banks have expanded into areas I don't think are so central.

I agree.

This is what happened as the result of the '99 legislation that effectively repealed most of the Glass–Steagall Act and blurred the lines far too much between commercial banking and investment banking.

What he also said in the same interview:

what I propose is somewhat in the spirit of Glass-Steagall in making a distinction between capital-market activities and trading activities and banking activities. But it is not specifically going back to Glass-Steagall.

Depending on the details, that sounds reasonable.

In my judgment we don't need to regulate the capital markets so heavily. You have some extreme cases where individual institutions are so big and so vulnerable, yes, you might want some regulation of capital and leverage,

I dont see where he is saying no regulation...but not heavy regulation.,....with the exception of possbily heavier (?) regs regarding the out of control leveraging that took place.

And derivatives? No regulation, IMO, is asking for more problems.

added:

Another recent statement by Volcker:

Paul A. Volcker, the former chairman of the Federal Reserve and an adviser to President Obama, told a room packed with banking executives on Tuesday to “wake up” to the need for more drastic regulatory changes....

....Mr. Volcker criticized suggestions, made by executives at an earlier panel discussion, to strengthen financial markets primarily by giving more power to company boards to control risk. The chances that management boards would “understand the products you come up with” are slim, he said.

http://dealbook.blogs.nytimes.com/20...al-regulation/