Paul Volcker on Bank vs. Hedge Fund Risk-Taking

Paul Volcker, former Federal Reserve Chairman regarding risk profiles of banks vs. hedge funds:

"Maybe we ought to have a two-tiered financial system," Mr. Volcker said at conference at New York University's Stern School of Business. Banks "should not be taking extraordinary risks in the marketplace."

This is the basic premise of the financial system. Bank are inherently supposed to be risk-averse institutions, as discussed in this article about the US government's interference in the free market.

The rest of Mr. Volcker's comments are in the rest of the article on HedgeWorld.com.