In case you hadn’t noticed, not a heck of a lot has changed on Wall Street in the last year, despite various banking behemoths’ successful pleas for federal aid to float them out of the recession they were instrumental in creating. Well, that’s about to change—or so President Barack Obama says, at least.
The president sent a message to the financial industry Thursday, talking reform in sweeping strokes and claiming that he’s ready to do battle—tough talk from a president who might just need to prove his mettle after suffering some sizable political setbacks of late. —KA
“While the financial system is far stronger today than it was one year ago, it is still operating under the exact same rules that led to its near collapse,” Mr Obama said.
His proposals also include a ban on retail banks from using their own money in investments - known as proprietary trading. Instead, banks would be limited to investing their customers’ funds.
“Banking reforms do not come bigger than those proposed by President Obama,” the BBC’s business editor Robert Peston said.
This may mean that some of the US’ biggest banks, such as Bank of America and JP Morgan, whose shares were badly hit, may have to be broken up.