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Friday, January 22, 2010

Obama attacks the banks

The big news today is President Obama's proposed bank regulation plan.

The plan aims to limit the size of financial institutions and prohibit banks from conducting proprietary trading or investing in hedge funds or private equity funds.

In his statement, Obama said, "While the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse... Never again will the American taxpayer be held hostage by a bank that is too big to fail... If these folks want a fight, it’s a fight I’m ready to have.”

The plan would first have to be approved by Congress - where the plan is likely to hit tough resistance from lawmakers and the financial lobbyists who pull their strings - but if it passes it could have severe effects on the largest banks like Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Bank of America, as well as the market as a whole.

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