Subject: File No. S7-41-11
From: Hendrik R Woods

January 9, 2012

I do believe that commercial banks are worthy of receiving government assistance—and even, in extremis, taxpayer bailouts—because firms and consumers depend upon them for credit. In return for these enterprises being sheltered, however, large, systemically important banking institutions should be restricted in undertaking proprietary activities that present particularly high risks and serious conflicts of interest. Sponsorship and management of commingled private pools of capital (that is, hedge and private equity funds in which the banking institutions own capital is commingled with client funds) should ordinarily be prohibited and large proprietary trading should be limited by strict capital and liquidity requirements. It is surely inappropriate that those activities be carried out by institutions benefiting from taxpayer support, current or potential.