Wall St apologists are already touting out the "US banks will be disadvantaged against the rest of the world" argument in response to Obama's dramatic plan to restructure the "too big to fail banks." Unfortunately for them, the rest of the world is already doing equivalent things (for their context) so Obama's plans will not make US banks less competitive internationally. In fact, in many ways all Obama will be doing will be leveling the playing field by bringing the US approach back up to the rest of the worlds.
Yesterday there was "Obama bank plan wins tentative support in Europe", and today, this from Reuters:
Financial stability board welcomes Obama bank plan
The Financial Stability Board (FSB), charged by the G20 to coordinate national regulation in response to the financial crisis, on Saturday welcomed U.S. proposals to limit banks' size and trading activities.
The proposals are among a range of options the board is considering as its addresses the risk of banks being "too big to fail," it said in a statement.
Major European economies have offered support for President Barack Obama's plan, which could rewrite the world financial order, but indicated they had no plans to follow suit.
The FSB is considering several other options to address the "too big to fail" problem including targeted capital, leverage, and liquidity requirements, improved supervisory approaches and simplification of firm structures.
"A mix of approaches will be necessary to address the TBTF problem, given the different types of institutions and national and cross-border contexts involved," the FSB said.
"At the same time, these approaches must preserve an integrated financial services market and not create regulatory arbitrage through an uneven playing field."
The FSB will make recommendations to G20 leaders in October and publish an interim report shortly after a G20 summit in June.