A Spanking in Banking

Thursday, January 21, 2010 , , , 3 Comments




WSJ:

President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country's biggest banks, marking the administration's latest assault on Wall Street in what could mark a return, at least in spirit, to some of the curbs on finance put in place during the Great Depression, according to congressional sources and administration officials.

The proposal represents a sharply different philosophical shift from the view of banking over the past decade, which saw widespread consolidation among large financial institutions to create huge banking titans. If Congress approves the proposal, the White House plan could permanently impose government constraints on the size and nature of banking.

Mr. Obama's proposal is expected to include new scale restrictions on the size of the country's largest financial institutions. The goal would be to deter banks from becoming so large they put the broader economy at risk and to also prevent banks from becoming so large they distort normal competitive forces. It couldn't be learned what precise limits the White House will endorse, or whether Mr. Obama will spell out the exact limits on Thursday.

Mr. Obama is also expected to endorse, for the first time publicly, measures pushed by former Federal Reserve Chairman Paul Volcker, which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital. Administration officials say they want to place "firewalls" between different divisions of financial companies to ensure banks don't indirectly subsidize "speculative" trading through other subsidiaries that hold federally insured deposits.


I guess this places the monopoly on speculation and proprietary trading with the government. Score.

(also, that headline belongs to Minneapolis Fed)

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

3 comments:

cl5v5r said...

"A good spanking is the only thing I can think of ..."

hmmm, is there any other kind of spanking? especially for a "bad, bad little accounting blogger"

cl5v5r,

I'm really glad everything is fixed so you can spend your days threatening me with spankings. Yay recovery!

As for your question, I think you already know the answer so I'm going to go ahead and assume that was rhetorical.

AG

(p.s. I totally saw what you did there)

oh and next time, don't forget to link to the filth you are referring to, my dear.

How to Be a Bad, Bad Little Accounting Blogger

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