Liberals can't seem to let go of the "Obama is really a corportist" meme just in the same way that conservatives can't let go of the "Obama is a commie" meme. Neither are right, of course, which means the president is doing exactly what he should be doing.
Yet this recent story on FDIC and the Treasury Department's new rule on capital should torpedo the idea that the president is secretly doing the bidding of our financial sector.
Regulators are acting to require U.S. banks to build a sturdier financial base to lessen the risk that they could collapse and cause a global meltdown.
The eight biggest banks will have to meet stricter measures for holding capital – money that provides a cushion against unexpected losses – under a rule that regulators are adopting Tuesday.
The Federal Deposit Insurance Corp. and the Treasury’s Office of the Comptroller of the Currency voted to require those banks to raise their minimum ratio of capital to loans to 5 percent from the current 3 percent. The Federal Reserve will vote at a public meeting later Tuesday.
The banks’ deposit-holding subsidiaries will have to achieve a ratio of 6 percent. Because the deposits are insured by the government, the subsidiaries are subject to a stricter ratio requirement.
The new regulation won't take effect until 2018 but it is progress. More importantly, it is exactly what I wanted to see in terms of a return to Glass Steagal-type regulation on the financial sector. The banks should not be gambling with my fucking money. Period.