Gary Cohn should not weaponise bond-liquidity fears

GARY Cohn should know better than to sow fear of dysfunctional US markets. Mr Cohn, who recently stepped down as chief operating officer at Goldman Sachs to go to Washington, lived through the 2008 financial crisis, which was ignited when credit markets grounded to a halt. He watched US debt markets bounce back on the heels of government bailouts and Federal Reserve stimulus. And he just led his former firm during a banner period - for debt trading.

Yet, he seems to think that US markets are fundamentally flawed. Mr Cohn, who's now President Donald Trump's top economic adviser, explained in a Bloomberg Television interview on Friday why it was important to overhaul the banking regulations prescribed by the Dodd-Frank Act of 2010. As part of that, the government will also scrutinise the so-called Volcker Rule, which limits how much banks can trade with their own money.

"All the banks in this country have been hugely burdened by enormous regulatory cost," Mr Cohn said in the interview. "We want well-regulated banks, but we want banks that function. We want markets that function. We want lending to function."