On January 21, US President Barack Obama shocked the financial markets by proposing rules that would prohibit commercial banks from making trades for their own accounts and prohibiting banks from owning or investing in hedge funds or equity funds.
We should no longer allow banks to stray too far from their central mission of serving their customers, Obama said in a White House address.
The proposals were immediately dubbed the Volcker Rule, a nod to the aggressive cutbacks advocated by former US Federal Reserve chairman Paul Volcker, and a sign of who Obama is listening to these days.
Volcker argues that limiting commercial banks from wading into investment banking would be in the...
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