Obama Sticks It to the Banks

Whither Larry Summers and Timothy Geithner? President Obama announced plans for new regulations on banks on Tuesday alongside former Federal Reserve Chairman Paul Volcker. Saying that he’s prepared for a “fight,” Obama announced the “Volcker rule,” which would 1) prevent banks from owning, sponsoring, or investing in a hedge fund or private-equity fund, and 2) place limits on the size of banks so that they don’t become “too big to fail.” “While the financial system is far stronger today than it was a year one year ago, it is still operating under the exact same rules that led to its near collapse,” Obama said. “My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout. It is exactly this kind of irresponsibility that makes clear reform is necessary.”