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Obama viewing new bank rules in global context-aide
January 21, 2010 / 10:32 PM / 8 years ago

Obama viewing new bank rules in global context-aide

WASHINGTON, Jan 21 (Reuters) - U.S. President Barack Obama is taking account of how America’s competitors are pursuing financial reform as he pushes curbs on the size and trading activity of U.S. banks, a senior White House aide said on Thursday.

“I think it’s important, as with all regulatory reform, you’ve got to be thoughtful, of how this is done in the international context,” Austan Goolsbee, a key economic adviser to Obama, told Reuters Television.

“We want to do this in coordination with our allies,” Goolsbee earlier told a White House media briefing.

Finance ministers from Group of Seven major industrialized nations will have a chance to discuss this issue when they meet in Canada on Feb. 5 and 6.

Goolsbee noted that Britain was considering a similar proposal with the aim of avoiding a repeat of the financial meltdown of 2008-2009. Other European governments have had a long-standing interest in finding a way to curb what they see as unwelcome speculative activity by financial firms.

Obama’s proposals, which need approval by the U.S. Congress, would limit banks’ ability to become too large and bar them from taking part in proprietary trading that is not related to serving their customers. Proprietary trading involves firms making bets on financial markets with their own money rather than executing a trade for a client.

Those institutions would also not be allowed to invest in, own or sponsor hedge funds or private equity funds.

Goolsbee disagreed with those who have said the proposed rules would put U.S. firms at a competitive disadvantage, noting the rules would also apply to foreign institutions operating in the United States.

“We’ve got 8,000-something banks in this country,” he said. “The vast, vast majority of them are competing just fine. They don’t own any hedge funds. They don’t own propriety trading. They don’t do any proprietary trading that’s not for their clients,” he said. (Editing by Peter Cooney)

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