Obama Calls for Limiting Size, Risk-Taking of Financial Firms

President Barack Obama, tapping into voter anger over bank bailouts, called for limits on the size and trading activities of financial institutions in order to reduce risk-taking and prevent another financial crisis.

The Roosevelt administration did the same thing in 1933. Obviously, banking reform, though repealed in 1999, did not prevent another financial crisis. The seeds of the current financial crisis were sown well before the repeal of Glass-Steagall.

Every sitting administration is reminded, at times with a figurative 2x4 across the head, that populace anger is centered around jobs, jobs, and jobs. The focus on banking reforms will fade when the general populace finds itself increasingly unemployed.

Expect the focus, in terms of another jobs bill/stimulus, to return soon.

Source: bloomberg.com