So this morning Obama announced his new plan to rein in Too Big To Fail banks, which we missed because we were out in the world doing some stuff for once. The plan, which was introduced via some absurdly cinematic tough-president talk ("My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform. So if these folks want a fight, it’s a fight I’m ready to have"), includes something called the Volcker Rule (so-named for former Fed chairman Paul Volcker, who thought it up). In a nutshell, the rule proposes that since banks have been proven to be unable to manage their risk, it should be managed for them, and that they should henceforth be prohibited from proprietary trading as well as owning and investing in hedge and private-equity funds.
It's more complicated than that, of course, like all of the other bank plans that have been floated by this administration that maybe we'll comb through once/if they actually start to seem real. But John Carney at Business Insider reports that so far, at least some bankers have already assessed the plan, found loopholes, and decided that it's actually not that big a deal: “This thing is about showing the public that Obama is standing up to Wall Street. So the rhetoric is heated. But the implementation will require far less change than people think right now," says a person Carney says is "familiar with the thinking at the upper echelons of one of our largest banks." Which, let's face it, could be anyone. But we believe it. As people familiar with the thinking of those in the upper echelons ourselves, we feel confident predicting they'll find a way to get around this. The only thing these guys love more than making money is being challenged to make buttloads of money, and with this plan it's like Obama just gave them a big, awesome, Rubik's Cube.
Big Banks Have Already Figured Out The Loophole In Obama’s New Rules [Business Insider]
Obama statement on limiting bank risk-taking [Reuters]