Friday, January 22, 2010

More on Obama's Bank Plan

A reminder: "details are still sketchy."

The WaPo story on the new bank plan:

Thursday morning at the White House, it seemed as if the two men had swapped places. A beaming Volcker stood at Obama's right as the president endorsed his proposal and branded it the "Volcker Rule." Geithner stood farther away, compelled to accommodate a stance he once considered less effective than his own.

The moment was the product of Volcker's persistence and a desire by the White House to impose sharper checks on the financial industry than Geithner had been advocating, according to some government sources and political analysts. It was Obama's most visible break yet from the reform philosophy that Geithner and his allies had been promoting earlier.

'Geithner's allies' include Goldman, Sachs, BofA, Citi, and JPMChase. Gee.

At its heart, Volcker's plan restricts banks from making speculative investments that do not benefit their customers. He has argued that such speculative activity played a key role in the financial crisis. The administration also wants to limit the ability of the largest banks to use borrowed money to fund expansion plans

As we said earlier, the "reforms" which obviated Glass-Steagall led to the self-incineration of a number of Wall Street firms, many of which are still sitting on taxpayer-funded TARP "rescue" funds.

How'd those 'reforms' work out for you?

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