Obama Calls for Limiting Size, Risk-Taking of Banks–Market Tumbles
Jan. 21 (Bloomberg) — President Barack Obama, tapping into voter anger over bank bailouts, called for limiting the size and trading activities of financial institutions as a way to reduce risk-taking and prevent another financial crisis.
The proposals, to be added to an overhaul of regulations being considered by Congress, would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds. He also proposes expanding a 10 percent market-share cap on deposits to include other liabilities such as non-deposit funding to restrict growth and consolidation.
Obama made the statement at the White House after meeting with former Federal Reserve Chairman Paul Volcker, who has been an advocate of taking such steps.
The proposals could affect trading at some of the nations largest banks, including New York-based Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., said Frederic Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. Banks conduct proprietary trading for their own benefit, not for that of their clients.
JPMorgan, Morgan Stanley and Bank of America Corp. tumbled more than 5 percent in New York trading, leading the S&P 500 Financials Index down as much as 3.3 percent, its biggest decline since October. Goldman and Citigroup Inc. dropped more than 4 percent.
Congressional Approval
The plan is subject to approval by Congress, where the presidents earlier regulatory proposal has hit resistance from some lawmakers and opposition from financial firms. Financial industry executives, lobbyists and analysts were critical of the proposal.
http://bloomberg.com/apps/news?pid=20601087&sid=an1RUYC9UqAY&pos=1
Video Copyright MSNBC 2010
Obama proposes proposal bank limitations limits size hedge funds derivatives JP Morgan Morgan Stanley Bank of America Goldman Sachs Paul Volcker
Duration : 0:7:44
[youtube 9MiImRmPZsM]
Tags: America, bank, Derivatives, funds, Goldman, hedge, JP, limitations, limits, Morgan, Obama, of, paul, proposal, proposes, Sachs, size, Stanley, Volcker
April 11th, 2010 at 11:27 am
thanks for …
thanks for commenting
April 11th, 2010 at 11:27 am
Sounds like he is …
Sounds like he is suggesting to reinstate glass steagall. Sounds good to me.
April 11th, 2010 at 11:27 am
Now the CFTC is …
Now the CFTC is going so far as proposing to eliminate 97.5 percent of previous leverage available on forex trading for individual U.S. investors; they already reduced it last year. They are going far overboard, and traders are already moving their accounts overseas. They don’t know where to draw the line and now they are taking away individual U.S. citizen investor rights.
April 11th, 2010 at 11:27 am
Well done Obama. …
Well done Obama. get stuck into these bankers, the blood suckers, leaches!
let’s see what the Gordon Brown does in UK, having poured in 100’s of billions of pounds into his scotish banks.
Let’s see what gordon’s scotish cabinet does to reform UK’s banking system!
April 11th, 2010 at 11:27 am
i think you’re …
i think you’re right; talking’s not enough anymore
April 11th, 2010 at 11:27 am
some big name …
some big name people have got to get serious prison time with no presidential pardons if Obama wants the trust of the American people.
April 11th, 2010 at 11:27 am
yes, think it’s …
yes, think it’s definitely a power struggle. thanks
April 11th, 2010 at 11:27 am
tks F2, and as one …
tks F2, and as one of youyr posters posted, I believe this is, a power struggle response to what just ocurred in mass.
What amazes me the most though, is that the media coverage for the past twenty yrs. has predicted the 2000 elec mess is flo. the 2004 mess in ohio, and the loss of a fifty yr. dem seat in mass. Its all fixed, and when its not the supremes will take care of it, just ask the corporations, laughing all the way to the bank
April 11th, 2010 at 11:27 am
but to say from the …
but to say from the beginning on, that health insurance isn’t helping the people, but only private companies, this is wrong. you forget that those companies must pay docters, medication, hospitals, etc. they don’t go on holidays to the bahamas to spend everything in rhum. what is the bank system then for? to keep you in good health? you thing that they would be more up to ‘help’ the people? i just think some people still don’t get what has happended last year …
April 11th, 2010 at 11:27 am
ok, but for those …
ok, but for those who don’t have the money to pay the doctor, hospital, clinic? Would you have enough money to pay a long term cancer treatment of several years? the idea of insurance is that everybody pays and then, when you are ill, they pay your treatments. some peaople will need more, some people will need less, but that’s the way how insurance works. if then the insurance companies spent this money somewhere else, then it’s a different problem.
April 11th, 2010 at 11:27 am
the “US financial …
the “US financial system” isn’t so much at fault as all the central banks for playing their gold-swapping games with all the Wall St. fraudsters being elevated to highest status for making derivatives, now there are even life insurance bundles worse than sub-prime, it’s all international derivatives traders and fraudsters.
April 11th, 2010 at 11:27 am
no, I’m in Canada. …
no, I’m in Canada. My taxes pay for what I need, directly to a doctor, hospital, clinic. NOT to a health insurance corporation. It’s important to know that when you throw in these for-profit corporations you get less service or none.
April 11th, 2010 at 11:27 am
April 11th, 2010 at 11:27 am
WOW! What happened? …
WOW! What happened?? Obama all of a sudden remembered his campaign promises? The Puppet In Command in an internal shoot-out with his financiers? Don’t get your hopes up too high…I’m betting on “temporary diversion, later to be avoided by hushed up loop holes”.
April 11th, 2010 at 11:27 am
Interesting side …
Interesting side note: some are seeing this as a move from Geithner to Volcker.Story on msnbcdotcom this morning.
April 11th, 2010 at 11:27 am
I’m gonna post a …
I’m gonna post a vid about goldman today.
April 11th, 2010 at 11:27 am
Of course this …
Of course this lashing is hot air aimed at federal banks,Goldman Sachs are excluded as they repaid TARP.Enjoying the deceit anyone?
April 11th, 2010 at 11:27 am
thanks
thanks
April 11th, 2010 at 11:27 am
i agree about oil…
i agree about oil…
April 11th, 2010 at 11:27 am
good ideas chena. …
good ideas chena. thanks
April 11th, 2010 at 11:27 am
thanks CDQ!
thanks CDQ!
April 11th, 2010 at 11:27 am
welcome erica
welcome erica
April 11th, 2010 at 11:27 am
Ok, so after you, …
Ok, so after you, all countries who have a health care system were responsible for the financial collaps? You a completely wrong man, it was the US financial system who is responsible. Isn’t it important to create the opportunity for all of your fellow citizens to have health care ? You worry for the assurances and banks? I pray for you not ever to get a cancer in your country …. or maybe you a just a rich guy …
April 11th, 2010 at 11:27 am
@MrClausify durr no …
@MrClausify durr no. Health insurance pays into insurance companies, corporations not people. This man is helping to ensure the next failure of banks will be held hostage for at least 4 TRILLION ADDITIONAL DOLLARS. It’s already waiting to be passed. Check out what Gerald Celente of Trends Research has to say about it and you’ll know what you’re talking about.
April 11th, 2010 at 11:27 am
Wow guys, your …
Wow guys, your comments are frightening! This guy is taking the our of your financial system one by one and you disapprove it. What do you want? Bush back on Wall Street? He’s trying to get the money out of the baks to give it back to the population via the health insurance and you don’t get it. It takes time and is a long way to get it done. And he’s not a marxist because of this, that silly to think. Don’t beleive what’s written in the papers but make up your own mind.