Breaking News Alert
The New York Times
Wed, January 20, 2010 -- 11:19 PM ET
Obama to Propose Limits on Risk Taking by Banks
President Obama on Thursday will publicly propose giving bank
regulators the power to limit the size of the nation's
largest banks and the scope of their risk-taking activities,
an administration official said late Wednesday.
This seems to go a lot further than just a tax on the banks, it sounds more like a return to Glass-Steagall.
The president, for the first time, will throw his weight behind that approach and presumably ask that it be included in legislation now in Congress dealing with financial regulation.Okay, great, now we just have to get Congress to grow some balls too.
He also would prohibit proprietary trading of financial securities by commercial banks, including mortgage-backed securities. Big losses in the trading of those securities precipitated the credit crisis in 2008 and the federal bailout.
The president will speak at an appearance on Thursday at the White House with Treasury Secretary Timothy Geithner, an administration official said, speaking on the condition of anonymity because the talks were private. It will come after a meeting with Paul Volcker, the former Federal Reserve Board chairman, who has been campaigning for months for legislation that would separate commercial banking from proprietary trading. A similar discussion is percolating in Europe, led by Mervin King, head of the Bank of England.
Oh, yea, I know this isn't much of a diary. But it's 11:45pm and I have to wake up in about six hours.