22 Jan 2010

Obama Gets It Right, For Once

Credit to him, Obama's latest banking proposals to de-link commercial banks from investment banking is a step in the right direction and very much needed. The facts are that commercial banks are guaranteed with taxpayer's money - the FIDC deposit insurance being amongst the primary source of funds. But because banks have been allowed since the repeal of Glass-Steagall to take commercial deposits and speculate in investment banking, which they co-owned, they are effectivly paying themselves enormous bonuses on the taxpayer's dime.

Even the most ardent centre-right or libertrian thinker is aghast at the cluture of bonuses amongst bankers. Obama's porposals are a step in the right direction and should attract widespread bi-partisan support. lets hope Republicans do not oppose for oppositions sake.

Stocks have slid upon the news and we might end up with smaller banks if the reforms go through Congress, a big if, but they are absolutly needed in one form or another.

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