Volcker makes his move
Dare I hope? The teaser in the WSJ about a big announcement from Barack Obama tomorrow sounds almost too good to be true. A cap on the size of financial institutions! A ban on risky investments in things like hedge funds and private equity! A real wall between commercial banking and speculative prop trading!
The banks of course will scream blue murder, while at the same time trying to say that those kind of walls exist already. But they can’t have it both ways. I’m also fascinated by the fact that Paul Volcker’s fingerprints are all over this announcement, while the names of Larry Summers and Tim Geithner are nowhere to be seen. Has Volcker done some kind of an end-run round Summers while no one noticed? I guess that things will come into more focus tomorrow. I, for one, can’t wait.