An enterprising piece of investigative reporting by Bloomberg’s Max Abelson, about a “secret” team inside Goldman Sachs charged with investing $1 billion (R8.6bn) of the firm’s money, raised eyebrows on Wall Street.

More important, the story raises major questions about whether the so-called Volcker rule will put too fine a point on the kinds of risks Wall Street banks are permitted to take.

Former Federal Reserve chairman Paul Volcker has been trying to solve a real problem: reducing the “heads I win, tails you lose” kind of risk-taking that Wall Street bankers and traders relish and that almost brought down the house in 2007. But that will not be accomplished by his eponymous rule. Not even close.

The only way to properly regulate the collective behaviour of bankers, traders and executives is age-old: through their pocketbooks. Unless, and until, they are again held financially accountable for their bad behaviour – as they were during the long era of private partnerships on Wall Street – there is no hope for meaningful change. The Volcker rule won’t change it. The entire Dodd-Frank financial overhaul won’t change it.

With that in mind, what to make of Goldman’s in-house investment team? Despite the public pronouncements of Lloyd Blankfein, the chairman and chief executive, that Goldman has “shut off” the firm’s proprietary trading business in anticipation of the Volcker rule, Goldman still has a group run by a bunch of Princeton graduates known as Multi-Strategy Investing. According to Abelson, it “wagers about $1bn” of shareholders’ money “on the stocks and bonds of companies”.

The unit evolved from another secretive, hedge-fund-like unit inside Goldman known as the Special Situations Group, which was a way for partners to invest their considerable fortunes in all sorts of money-making strategies.

But so what if Goldman wants to invest its partners’ or its shareholders’ money in an organised, systematic and clever way? How are the rest of us hurt by that? And why should regulators try to stop Goldman from continuing to do it?

No one is forcing a partner at the bank to put money into such investments and, for that matter, no one is forced to be an investor in Goldman. If you don’t like the kind of business the firm does, then don’t buy Goldman’s stock or bonds.

But, you might think, we need protection from risky behaviour and bets by Goldman that can bring down our financial system.

That’s the gist of what the Volcker rule was originally drafted to accomplish.

Shouldn’t Volcker prefer that every firm on Wall Street have the sound risk-taking culture found at Goldman? Rather than spending countless hours and millions of dollars in legal and lobbying fees to try to craft a Volcker rule that the regulators and the regulated can live with, we would be better off junking it altogether.

In its place, though, we should craft an incentive system on Wall Street that rewards people for taking prudent risks and penalises them directly – in their own pockets – when the risk-taking goes wrong.

What should be gleaned from the behaviour of Goldman Sachs in the last decade is that a combination of prudent risk-taking and serious accountability is the path forward on Wall Street, not putting our collective faith in some bloated legal document crafted by a roomful of lawyers and lobbyists in the middle of the night.

William Cohan is a Bloomberg columnist.