President Obama announced on Thursday, January 21 his intention to push for banking reform and new legislation to limit the size of banks to prevent the existence of banks that are “too big to fail,” and to have new regulations instituted that control the type and degree of risks banks can undertake in their investment decisions.
In a new article of mine on, “Real Banking Reform? End the Federal Reserve,” I argue that what is “too big to fail” and what is a reasonable investment risk will now be determined by the same politicians and bureaucrats whose misguided monetary and regulatory policies in the past got us into the financial and economic crisis through which we are passing.
The only real banking reform that can reduce the likelihood of a future cycle of investment and housing booms followed by busted bubbles is real monetary reform. And this requires abolishing central banking and the establishment in its place of free market competitive banking.
And I suggest a six-point plan to move in that direction.
The type of banking reform proposed by the president means only more of the same failed government interventionist policy.
