One is that banks should NOT be allowed to have prop trading in-house... at all. Proprietary trading (aka 'prop trading' or PPT) occurs when a firm trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments, with the firm's own money as opposed to its customers' money, so as to make a profit for itself.
At the very least, the clearing house and the trading arm now reside withing the same banks need to be completely separated into different companies, so as to have a physical secure and unbreachable wall in between.
The reason is that when the the banks, who are active players in trading the markets, can see where all the future market transactions are heading with their clearing house operations, they can position and front-run everybody... (great for them... BAD for everyone else!). It's an unfair advantage not only disrupting the normal functioning of the markets, but it also creates great deal of market volatility and instability.
It is absolute insanity that with new government regulations coming out of almost everywhere everyday, there is no regulatory oversight in that aspect of banking industry activities.
