The ex-Treasury officials, who served both Republican and Democratic administrations, wrote that the reform measure, which would prohibit commercial banks from owning or investing in hedge funds, private equity funds or "proprietary trading" operations, is a reasonable trade for the benefits banks reap from "public support by means of access to the Federal Reserve and FDIC insurance."
And while the rule may not alone prevent the next financial crisis, they said it's a crucial part of a more expansive regulatory reform package:
"We fully understand that the restriction of proprietary activity by banks is only one element in comprehensive financial reform. It is, however, a key element in protecting our financial system and will assure that banks will give priority to their essential lending and depository responsibilities."
The 'Volcker Rule' got fresh support this morning when five former Treasury Secretaries endorsed the key financial regulation in a letter to the Wall Street Journal.