Thursday, January 21, 2010

Obama Bank Overhaul

A return to sanity in banking

WSJ Marketwatch — The sweeping reform President Barack Obama unveiled Thursday is short on detail, but in its broadest terms it aims to both preserve Wall Street's ability to take risk and strengthen the money system at the core of banking.

Finally, someone with the power to make it happen is talking about a response equal in scope to the system's failure.

Let's start with some of the problems of this vague plan. First, it's not Glass-Steagall, the 1933 legislative wall thrown up between commercial and investment banking. It's not a pure divide between investing and the credit system.
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Big Bank Shares Hammered After Obama Proposal

ABC — A new proposal from President Barack Obama to limit the size and trading capabilities of big banks is sending shares of major financial institutions plummeting.

At the White House Thursday, Obama vowed to fight big banks with tougher regulations that he believes would head off the cascading failures that required billions bailout funds for Wall Street.

He wants new rules that would restrict banks in the use of depositor money and also limit how big financial institutions can become.
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Obama's bank reform plans scare the markets

BBC — US and European stocks have fallen sharply after President Barack Obama proposed significant limits on how banks can operate.

The main US share index, the Dow Jones, fell more than 200 points or 2% as the president delivered his speech, with banking stocks most affected.
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