This latest proposal appears to have Paul Volcker's fingerprints on them which is a very good sign as far as financial reform is concerned. http://www.nytimes.com/2010/01/22/business/22banks.html ------------------------------------------snip Declaring that huge banks had nearly brought down the economy by taking “huge, reckless risks in pursuit of quick profits and massive bonuses,” President Obama on Thursday proposed legislation to limit the scope and size of large financial institutions.
The changes would prohibit bank holding companies from owning, investing, or sponsoring hedge fund or private equity funds and from engaging in proprietary trading — what Mr. Obama called the Volcker Rule, in recognition of the former Federal Reserve chairman, Paul A. Volcker, who has championed the restriction. In addition, Mr. Obama will seek to limit consolidation in the financial sector, by placing curbs on the growth of the market share of liabilities at the biggest firms. An existing cap, put in place in 1994, put a limit of 10 percent on the share of insured deposits that can be held by any one bank. That cap would be expanded, officials said, to include liabilities other than deposits. Both changes require legislation by Congress, and Republican leaders, as well as the banking industry, signaled on Thursday that they would resist the proposals. Mr. Obama, speaking in the Diplomatic Reception Room at the White House, said he anticipated such opposition, saying an “army of industry lobbyists” had already descended on the capital to oppose regulatory reform. “If these folks want a fight, it’s a fight I’m ready to have,” he said. With his comments, the president, for the first time, threw his weight behind an approach long championed by Mr. Volcker, who flew to Washington for the announcement. Mr. Volcker’s chief goal has been to prohibit proprietary trading of financial securities, including mortgage-backed securities, by commercial banks using deposits in their commercial banking sectors. Big losses in the trading of those securities precipitated the credit crisis in 2008 and the federal bailout. Mr. Obama was flanked Thursday by Mr. Volcker; William H. Donaldson, a former chairman of the Securities and Exchange Commission; Barney Frank, the chairman of the House Financial Services committee; and Christopher J. Dodd, the chairman of the Senate Banking Committee. -raghu. -- "I don't care who you are, Fatso. Get the reindeer off my roof!" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
