Poll: Should Government Limit Risk-Taking by Banks?
Having just proposed a new tax on banks, President Obama on Thursday called for limits on risk-taking at big financial firms, including new restrictions on the size and trading practices of big banks, saying he wanted to prevent a return to the "old practices" that led to the financial meltdown.
"A couple of months ago the President began discussing with his economic team the need to include in financial reform more specific and stronger provisions to limit the size and scope of financial institutions to cut down on excessive risk taking," a senior administration official said.
Obama proposed new rules to prevent banks or financial institutions that own banks from owning, investing in or sponsoring a hedge fund or private equity fund.
The rules would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit.