NEW YORK ( TheStreet) - It is hard to find a Wall Street insider who supports the Volcker rule, but Steve Rattner reluctantly stepped up to the plate at the Bloomberg Hedge Funds Summit in New York on Thursday. Participating in a panel discussion, Rattner first questioned aloud whether he wanted to address the topic before saying, "I have actually come around to the view after initial skepticism that something like the Volcker rule was an important piece of the outcome: that you cannot have financial institutions using depositors' money that has federal guarantees behind it in ways that are imprudent."
"I don't want to see the financial services industry--especially for New York's sake--destroyed over this, but Wall Street did some stuff that isn't exactly perfect and now they're going to have to deal with the consequences," Rattner added. The same could be said of Rattner himself, whose astonishingly successful career was brought crashing to earth by a scandal involving alleged kickbacks to New York state's pension fund. The former reporter for The New York Times turned investment banker turned private equity star was tapped by President Obama as "car czar" to turn around the U.S. auto industry. However, Rattner soon resigned from the cabinet level post amid investigations by the Securities and Exchange Commission and the New York State Attorney General. He settled the investigations for a combined $16.2 million. Rattner, who has temporarily been barred from various Wall Street businesses, is Chairman of Willett Advisors, the family foundation of New York Mayor Michael Bloomberg. The Volcker rule, one of the most controversial aspects of the Dodd-Frank financial reform legislation, is still being hashed out. However, its goal is to place strict limits on risky activities by banks such as proprietary trading and private equity investing. Analysts expect the rule to severly crimp profitability at Bank of America ( BAC), JPMorgan Chase ( JPM), Citigroup ( C) and Morgan Stanley ( MS), but most of all at Goldman Sachs ( GS).