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Problem: Wall Street banks are large firms. Accepting deposits and making home mortgages is only a small part of what the biggest banks do to make money and maximize profits for their investors. Their trading arms will also often invest in high-risk ventures that could pay big — or lose big.
There is nothing inherently wrong with banks betting their profits in order to make more money. The main problem is when banks don’t simply use their own money for these high-risk bets, but also use their customers’ money. This created two problems that led to the 2008 financial crisis and taxpayer bailout. First, it put the life savings of ordinary people – who are in no position to gamble with their money — at risk. Second, it put the overall banking system at risk because so much money was being gambled with.
Solution: The new Wall Street reform law will institute what is called the “Volcker Rule”, a reform advocated by former Federal Reserve Board Chairman, Paul Volcker. The Volcker Rule is intended to get banks out of the business of placing high-risk bets with other people's money.
Regulators at the Federal Reserve are in the process of hammering out how exactly the Volcker Rule will be implemented.
Learn more: New York Times, 10/11/11, With Volcker Rule, Wall Street Braces for Change
Even with the knowledge I’ve gained working as a consumer advocate for several years, getting my finances in order has been a work in progress.
Until recently, I did not have estate and end-of-life planning in mind, but it was the natural next step in my quest to be a responsible adult, with a nudge from the existential threat of the COVID-19 pandemic.
Advance directives are legal instructions that include a living will (different from a regular will) and a health care proxy. In them, you state what treatments you do or don’t want at the end of your life and who you want making health care decisions for you if you can’t.
Before listening to In Case You Get Hit By a Bus, I didn’t know about insurance that covers the costs of long-term care, such as home health care or nursing home care, for people who need assistance with daily living activities.
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