THE TELEGRAPH: Wall Street was rocked today as President Barack Obama declared war on the US financial sector with plans to break up banks.
Mr Obama said he would rein in excessive risk taking by banning banks from running proprietary trading desks, hedge funds or private equity units.
In a raising of the US Government’s rhetoric against Wall Street, Mr Obama said of the financial sector: “If these folks want to fight, it’s a fight I’m ready to have.”
The news sent US shares sharply lower with the Dow Jones index falling 198 to 10404.54, led by the banking sector.
Goldman Sachs was off 8.42 at $159.37, JP Morgan fell 2.51 to $40.89 and Citigroup was 14 cents lower at $3.32.
Mr Obama said the state funded rescue of the banking sector in the credit crisis was “deeply offensive” but “necessary” as he set out reforms he claimed would ensure the taxpayer never again had to pick up the bill for failures on Wall Street.
The reforms follow proposals made by Paul Volcker, the White House adviser and former Federal Reserve chairman, who has been calling for regulation in “the spirit of Glass-Steagall”, the US act which saw investment banks broken up from retail banks. Barack Obama calls for limits to size and trading activities of banks >>> Jonathan Sibun, Assistant City Editor | Thursday, January 21, 2010
