It is at least as important to look at the level of interest rates in nominal and real terms, and ask whether their present setting involves a significant risk that the economy will overheat or contract. As you know, a year ago we thought that the continuation of the then setting of interest rates would risk the former outcome.
Rather, the Volcker Rule urges banks to return to their traditional stronghold of commercial banking business, in which they can utilize their informational advantage based on long-term relationships with their customers. In other words, the rule attempts to insulate long-horizon relationship banking from the occasional brutality of the sometime short-horizon capital markets.