Thursday, January 21, 2010

New Financial Regulation

What will this new proposed financial regulation mean for the markets? It is hard for me to believe that GS would remain a bank holding company, especially since they derive most of their profits from proprietary trading activities. I think that becoming a bank holding company was convenient and necessary during the times, but if this goes through I can easily see GS give that up and what ever special privileges come with it.

Not really sure what JPM would do. But the guys in business are a lot smarter then the government is, and I am sure they will find a way around it.

What are your thoughts?

1 comment:

  1. I absolutely agree that GS never intended to stay a bank holding company, Morgan Stanley either. They did what they needed to do. I think the tide is currently changing as far as playing ball with the administration. That MA election might have been a game changer. Just this morning I read that Pelosi said she doesn't have enough house votes to pass the health care bill.

    I think the banks are playing the waiting game to see what happens with the mid-term elections later this year. As far as what would the proposed regulation mean? Honestly I don't even spend any time thinking about it until something were to actually happen. Look how much breath has been wasted on the health care debate that may not even end up being a bill now.

    Historically the banks have been smarter than government employees so I don't see that changing any time soon. Besides, anything that gets passed will be immediately reversed if the GOP gains control again. I think we're headed for a lot of stalemate situations until November's mid-term elections. Unfortunately that includes the economy. The Republicans are more than willing to sacrifice what's needed to be done in order to gain control again.