Obama to go on offensive against big banks-sources

WASHINGTON | Wed Jan 20, 2010 10:01pm EST

WASHINGTON Jan 20 (Reuters) - President Barack Obama will go on the offensive against big banks on Thursday, voicing support for reforms that could threaten large institutions' bottom lines, according to financial industry sources.

Obama is expected to publicly voice support for some of the ideas advocated by Paul Volcker, the former Federal Reserve chairman who heads Obama's economic recovery advisory board.

The president is to meet with Volcker in the Oval Office on Thursday and is expected to advocate Volcker's idea for restrictions on large institutions' proprietary trading operations, the sources said, speaking anonymously because the proposals have not been unveiled.

Volcker and other policymakers have raised concerns about the risks and conflicts of insured depository institutions investing their own money, as opposed to customers' money, in securities, commodities, derivatives, hedge funds, and other financial products.

Obama is also expected to at least nod to the idea of giving regulators the power to break up big financial firms if their activities pose risk to the financial system, as well as call for stricter capital requirements and stricter regulation of derivatives. (Reporting by Karey Wutkowski; Editing by Gary Hill)

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Comments (1)
chaucerian wrote:
I’ll believe it when I see it. Wall Street has the country and the White House by the gonads. Will Obama ever actually take some action to right the wrongs of the past decade or two? Probably not. The Wall Street swine will keep on snorting and pigging out at the food trough kept full by the US taxpayers.

Jan 21, 2010 12:02pm EST  --  Report as abuse
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