Bank shares hit by Obama plans
Share
Banks shares have dropped on the news that President Barack Obama is planning an assault on the US banks by curbing risky trading practices.
Obama’s ambitious reforms of the US banking system will mean limits to banks’ size, curbs on risky investments, and limits to the use of company funds.
Obama says: “Never again will the American taxpayer be held hostage by a bank that is too big to fail.
“Limits on the risks major financial firms can take are central to the reforms that I have proposed.”
Royal Bank of Scotland have dropped 4% today, while Barclays has fallen by over 6%.
George Osborne has reportedly backed Obama’s reform plans, saying that separating retail banking from investment activities is something that he advocated but at a global level.
A report from Reuters says that prime minister Gordon Brown is going to study the proposals but that the direction of Obama’s plans is one that Brown feels comfortable with.
It comes just a week after Obama announced his plans to tax banks in a bid to recoup money paid to US banks during the financial crisis.
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
