Obama: Action Man of Wall Street Reform

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The home page of BBC News is trumpeting President Obama‘s Wall Street reforms as something of a landmark. And indeed it is. After losing a senate vote several days ago, just like with healthcare, the bill has finally been passed by sheer will it seems, and it’s safe to use the adjective ‘sweeping’ to describe it.

Washington is now setting up a new watchdog agency to keep a close eye on the tricky world of derivative markets, and requiring that banks must obtain proof from borrowers that they can pay back the loan. Obama stressed (see video below), in one breath that, “the goal is not to punish the banks,” whilst also making it clear that Americans would “never again pay for Wall Street’s mistakes.” Of course this new agenda has not gone down well with the Ferrari-boys of the financial world, and they tried very hard, as the President pointed out, to scupper the bill – spending millions on advertising, by lobbyists, to discredit it. Wish I could’ve seen some of those ads!

Regardless, the President has cut through and once again gotten his way and as BBC’s business editor, Robert Peston, pointed out, “What does it all mean? In theory banks will be taking fewer risks – and they will certainly be less profitable.” It will be interesting to see when/if Europe will follow suit or just talk tough.

Here is the video:

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