Obama's Bank Rhetoric Misses the Mark

The viability of President Obama's proposals on bank reform remains to be seen as they pass through Congress, but they send an undoubtedly sharp signal about what the next battle after health care will be. The principles are difficult to argue against, since the financial system has become increasingly concentrated in a handful of top-heavy firms, and overlap between retail banking and more complex trading activities has not been reduced. In this situation, the specter of systemic risk is held back only by the precedent of a nearly-unlimited commitment by the U.S. Treasury and Federal Reserve to prevent such a disaster.