The Obama administration is doing everything it can to counter adverse sentiments in a bid to avoid catastrophes like the Massachusetts Senate race. President Obama has announced plans for banking and financial industry reforms and so far, plans are leaning towards the left.
Billed as the “biggest overhaul of Wall Street in recent times”, the new regulations prohibit banks from “owning, running or investing in hedge funds or private equity groups for their own profits”. The regulations will also “prevent the consolidation of the banking sector”. Obama kept ringing in the changes with proposals aimed to help families pay for child and elder care, settle student loans and save up for retirement.
The proposals and regulations are widely seen as damage control to the defeat suffered by the Democrats in the Senate race. The loss is attributed to Obama’s dogged push for healthcare reform and inadequate attention to getting the economy back on its feet. Massachusetts has been a Democrat stronghold for 47 years and the Republican victory there has been hard to stomach.
Obama’s new policy will be called the “Volcker rule”, as it was mostly advocated by the former chair of the Federal Reserve, Paul Volcker. The Volcker Rule and other proposals will have to be approved by Congress to become a reality and that may be easier said than done. Obama acknowledged that industry lobbyists were already preparing to fight the proposals and stated that his administration was ready to face and overcome them. “If these folks want a fight, it’s a fight I’m ready to have,” said the President.
