BBC News: Click Here
According to BBC News, US President Barack Obama has proposed significant new curbs on the activities of banks to try to prevent future financial crises. This would restrict banks to be more conservative when coming to investing.
As you know, the collapse of Lehman Brothers was a result of risk-taking investments. In my opinion, this new regulations is an appropriate step in recovering the economy fully. However, this regulation would be opposed by many banks who have been profiting from. “US stocks such as JP Morgan Chase and Bank of America fell sharply as the sweeping planned reforms were announced.” As you see, many investment companies like JP Morgan Chase and Bank of America were profiting a lot from risk-taking investments. Their stocks went down as this new regulation to curb risk-taking investments was announced.
In sum, I think that Obama’s new bank regulation is a necessary procedure in recovering the economy.