It was great to see President Obama renew his focus on financial reform last week, even if it looked like an attempt to distract voters from his party’s stunning loss of the Senate election in Massachusetts. Even so, by promoting the ideas of Paul Volcker — the esteemed former Federal Reserve chairman — the White House is finally elevating the discourse on how best to rein in risky behavior at banks and protect beleaguered taxpayers from future bailouts of Wall Street.Those discussions are especially important, given that Congressional efforts to overhaul the financial system have thus far done little to ensure that we will never again have to fork over hundreds of billions of dollars to rescue bankers from their own bad bets. “Too big to fail” turned out to be “too hard to tackle” for lawmakers.So the proposals from Mr. Volcker, a man whom the White House has marginalized in the strangest of ways until now, are a step in the right direction. That’s because they aim to keep highflying traders and other gamblers inside of banks from getting their hands on or putting at risk the old-fashioned savings of average depositors.
By Gretchen Morgenson, Jan. 24, 2010 NYT

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