Volcker Just Wants 'Sensible' Bank Rules

NEW YORK ( TheStreet) -- Paul Volcker, the former Federal Reserve Chairman and adviser to President Obama, defended the rule named after him following concerns raised by credit ratings agency Standard & Poor's that it might hamper banks' creditworthiness.

In a recent report, S&P analysts stated that different versions of the Volcker Rule were being contemplated. The Wall Street Journal followed up shortly afterward with an anonymously-sourced story that said regulators were in disagreement about how strict the rule ought to be. The controversial rule is aimed at reducing risk in banks by placing strict limits on the amount of capital they are allowed to wager on directional market bets.

S&P stated that a stricter version of the rule might actually hamper the creditworthiness of Morgan Stanley ( MS) and Goldman Sachs ( GS) by making them less profitable.

Volcker responded to questions about the S&P report via email, writing just two sentences. "I don't know what S&P defines as a 'less strict' or 'stricter' Volcker Rule" he wrote. "What I want is sensible rules which surely will make banks safer and more easily managed." 

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Stocks

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

What Does China's Tariff Deal Mean for Automakers Like Tesla?

What Does China's Tariff Deal Mean for Automakers Like Tesla?

Lowe's Taps Home Depot Veteran As New CEO

Lowe's Taps Home Depot Veteran As New CEO

WATCH: 4 Experts Lay Out How Wealthy Investors Should Play Today's Risky Market

WATCH: 4 Experts Lay Out How Wealthy Investors Should Play Today's Risky Market