Obama Wants More Restrictions on Banks

President Barack Obama proposed  new rules designed to restrict the size and activities of the U.S.’s biggest banks. The text of his proposal has not been released yet. All we have is the video, embedded below.

The White House wants commercial banks that take deposits from customers to be barred from proprietary trading,  owning hedge funds or owning private equity firms. It sounds like Goldman Sachs and Morgan Lewis would give back their back charters. (Of course, they only grabbed those charters in order to get the liquidity from the TARP.)

The White House also wants new limits on the size and concentration of financial institutions. He mentioned the existing cap on customer deposits and seems to want to reduce that cap. I think Bank of America is the only bank that is currently close to that cap.

In the end this is just proposed legislation from the White House. They would still need to convince Senator Dodd to revise his proposed legislation and get the votes to pass it in the Senate, reconcile it with the House bill and get it passed by the full Congress.