Bank Limits Come With Big Trade-Offs (Foreign Banks will thrive...)

Atlantic Wire ^ | 01/22/10 | Max Fisher

[SoFloFreeper]

President Obama has outlined his populist-leaning plan to take on big banks. The proposed regulation would aim to halt proprietary trading and squelch "too big to fail" banks--two risky aspects of the banking system that helped contribute to the collapse... Won't Stop Foreign Banks A loophole that Washington Post's Sebastian Mallaby worries will weaken U.S. banks without solving the real problems. The proprietary trading ban "presumably would not extend to foreign banks. The foreigners would still gamble in U.S. markets, and the risk of destabilization and a job-destroying credit crunch would continue. In the good years, the foreigners would reap profits, and U.S. banks would lobby regulators to relax the definition of proprietary trading so that they could stay competitive. Moreover, when the next crisis arrived, it would not necessarily be foreign taxpayers that paid for the bailout. The risks taken by Iceland's banks might well end up being partially paid for by British taxpayers."

[SoFloFreeper]

Exactly what I thought. You know, why wouldn't investors put their dollars in FOREIGN banks if the Obamacrats are going to be sticking their noses into domestic ones.

For that matter, why would domestic banks STAY in the USA...why not just move offshore, to Hong Kong, or somewhere where capitalism can thrive relatively unfettered?

One thing is certain: Obama is destroying our economy.

[massgopguy]

Let the banks leave. They’re not Green Jobs anyway.

[AniGrrl]

These regulations are more or less like the Glass-Steagall act. Are we sure this is really a bad move? I’m not convinced. I’d like to hear Karl Denniger (who’s pretty excited) weigh in on the foreign bank aspect.

[JimmyMc]

Seems like a lot of things Barack does has Unintended Consequences.

[DonaldC]

I agree with you, I don’t have a feel for the scope of what obama is trying to do to say if it is good or not. While the banks are not totally at fault for what has happened, they certainly bear some of the blame. As for foreign banks, I would rather bury my savings in the back yard rather than go that route. Course with the dems in charge, in a few years I’ll be lucky to be able to buy a hershey bar...LOL

[Paperdoll]

LIKE GLENN BECK SAYS, YOU’VE GOT TO KEEP TABS ON THAT LEFT HAND WHILE THE RIGHT HAND IS MOVING.

[pepperdog]

Obama is becoming simply unbelievable! After the Mass. election his “pivot” (quoting Sarah Plain because all the media is suddenly using the word) is to attack the banks. Now isn't that a grand recipe for job creation? The man is demented and it seems his advisers are even worse off then he is.