Thanks for this article. The moral sentiments and grand legacy embodied in Paul Volcker makes him a living legend, and a credit to the profession. Having taught and written on governance and investment ethics for the past 10 years at Marquette University in my Sustainable Finance course (and worked for one of the last partnership investment banks left in the industry) where my students and I have discussed and examined the 2008 financial crisis, among others, I have to politely disagree with his position shared by most regulators that the answer is always more regulation. He himself acknowledges the problem in the article of more and more regulation is in effect “no limit tail chasing”.

The fundamental problem is the problem of agency, and misalignment with shareholders, which adversely affects clients. Fix the incentives and you address the client “in the crossfire”. The way to do that is to separate investment banking from commercial and retail banking (re-enact Glass-Steagal) , and ban investment banks (and hedge funds) from becoming public companies (mandatory reintroduction of the partnership model). Investment banks are in the business of risk taking and as such must be managed as owners not hired hands. They are inherently different from Main Street banks and companies and must be treated as such. Ad infinitum of rules and regs over the last century is proof of this difference, but must be addressed at the core, not on the piecemeal margins, which has been our current state since the first investment bank went public in the late 1970s.