Thursday, March 18, 2010

Kanjorski and Volcker

The January 27 issue of The American Prospect had an article, "Breaking the Banks," by
Tim Fernholz. Here is an excerpt:

“Rep. Paul Kanjorski of Pennsylvania agreed not enough was being done to limit the types of risks that banks could take and was receptive to Volcker's critique. He authored an amendment that would allow regulators to order any financial firm out of a certain line of business if it proved a risk to the system; for instance, American International Group could have been ordered to divest its risky Financial Products division…


“In December, Obama, reacting to both Volcker's policy critique and bank risk-taking, specifically asked his team to build on the Kanjorski amendment by creating a mandatory regulation rather than a firm-by-firm approach, according to a White House official…

"’It's quite an accomplishment for the president to pick up [this idea] into the red zone, a football analogy. We just made up 30 yards,’ Kanjorski told me. ‘Some people are of the opinion that it may be an afterthought; I just don't think it is. I anticipated that they would either at some point endorse it or the president would endorse it.’”

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