buy canada goose jacket How Obama’s bank reforms could affect banks buy canada goose jacket

Canada Goose online President Barack Obama is looking at Canada Goose Outlet limiting risk taking at banks. Canada Goose online

canada goose clearance sale But his proposals on Thursday were tantalizingly vague. He said he wanted to limit buy canada goose jacket the cheap Canada Goose amount of uk canada goose borrowing that banks can do relative to their peers and limit canada goose uk outlet their trading activities to buying and selling securities to customers. canada goose clearance sale

Canada Goose Outlet But it is not clear whether relative borrowing limits will be low enough to force banks to reduce their debt. And the line between buying and selling securities on behalf Canada Goose Parka of customers, and doing so on behalf of the bank, canada goose clearance can be blurry. Canada Goose Outlet

canada goose coats The White House has also said it wishes to prevent banks from canada goose clearance sale investing in and sponsoring hedge funds and canadian goose jacket private equity firms, but it is not clear if banks will also be prevented from financing these clients, which can itself be risky. canada goose coats

cheap Canada Goose Wall Street firms are likely to fight any efforts at reform, and President Obama has lost some political capital after a Canada Goose Online bruising effort to pass health care reform, and losing a Senate seat in a special election in Massachusetts. cheap Canada Goose

Any legislation will take months if not years to wind its way through Washington, and predicting how it will the law will end up working is difficult. But here are some possible outcomes of Obama efforts:

canada goose coats on sale KILLING IT SOFTLY On a conference call with journalists, Goldman Sachs Chief Financial Officer David Viniar said he had not seen details of Obama plan, but that he generally appreciates government policies that stabilize the financial system. canada goose coats on sale

Canada Goose Jackets Experts said that banks were unlikely to publicly disagree with Obama, but are sure to furiously lobby behind the scenes to water down any proposal that the president and legislators put forward. Canada Goose Jackets

Banks took similar steps when rulemakers and lawmakers sought to move more derivatives trading onto exchanges and into clearinghouses. Although trade groups initially Canada Goose sale said they supported efforts at reform, proposals now look likely to be watered down. Obama efforts to reduce risk taking could meet a similar fate.

Whether that is canada goose coats on sale a good thing is debatable. Major banks including Lehman Brothers took large proprietary bets that resulted in big losses, and in Lehman case, forced it into bankruptcy. But many bank executives are quick to argue that if they can do canada goose coats this kind of trading, foreign banks and unregulated domestic entities will, which may not reduce Canada Goose online systemic risk.

canada goose clearance GRAY HAIR TRIUMPHS A number of elder statesmen of the financial world, most notably former Federal Reserve chairman Paul Volcker, believe that Obama is right, and that large banks should canada goose be severely constrained from making bets with their own funds. canada goose clearance

buy canada goose jacket cheap Obama seems keen to personally shepherd these changes through Congress, and given the populist outcry against Wall Street, he may have the political capital to do so. buy canada goose jacket cheap

canada goose store If he is successful, canada goose black friday sale the biggest banks will likely shrink further. canadagoosesale.info Obama fee on bank liabilities, announced last week, may collect less money than originally planned. canada goose store

Canada Goose Parka Talented risk taking traders will move to hedge funds and private equity firms, where their failures could have less of an impact on the broader market. Canada Goose Parka

canada goose deals Trading volume on major exchanges and in many financial markets may buy canada goose jacket cheap drop, because smaller players will have less capital available to consistently trade. canada goose deals

canada goose The biggest banks will likely become even less profitable, and more like canada goose uk black friday staid, slow growing utilities that pay high dividends to shareholders. canada goose

One question that remains is how far Obama will go in limiting banks from risk activities. Will a bank holding company be allowed to own a hedge fund, even if the regulated bank subsidiary cannot? Will commercial banks be barred from all investment banking activities? Will foreign banks that canada goose store operate in the uk canada goose outlet United States be constrained?

canadian goose jacket Also unclear is whether some institutions, such as Goldman Sachs, will be able to shed their bank charters to avoid restrictions on trading. Goldman Sachs CFO Viniar said on a conference call that the bank has no plans to get rid of its charter. Many investors believe it ought to, but regulators may balk at a move that would give Canada Goose Jackets them less oversight over a Canada Goose Coats On Sale company whose health is critical to the financial system. canadian goose jacket

canada goose black friday sale RULES CHANGE, BUT BANKS BACKSLIDE Even if Obama successfully implements his risk limitations, banks may find ways around them. Banks, for example, could buy securities and claim they were doing so canada goose uk shop in anticipation of client demand, when in fact they intended to make bets on the securities and hold onto them themselves. Or bank holding companies could engage in risky activity that leaves their subsidiary banks worse off. canada goose black friday sale

Canada Goose sale But if regulators are sufficiently vigilant, and limit risk taking across many businesses in the financial sector, the brainpower canada goose factory sale that Wall Street devotes to finding loopholes may migrate to other sectors of the economy. cheap canada goose uk From https://www.canadagoosesale.info Obama standpoint, this may be the most positive scenario. (Reporting by Dan Wilchins) Canada Goose sale.

2 thoughts on “Or bank holding companies could engage in risky activity that

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