Tim Fernholz argues Obama‘s endorsement of stiffer bank regulation has been a long time coming:
President Barack Obama signaled an abrupt shift in his financial regulatory reform efforts last week, endorsing new rules proposed by former Fed Chair Paul Volcker to restrict both the size and scope of bank activities.
The decision prompted breathless commentary: Was this a populist tack in response to Democratic political setbacks in Virginia, New Jersey, and Massachusetts? Was this a sign that the president’s moderate economic advisers, Treasury Secretary Tim Geithner and Director of the National Economic Council Larry Summers, were losing influence after steady criticism of their financial policies from both the left and the right? Get beyond the Washington speculation, though, and the real story is that Obama himself is setting the tone of regulatory reform in response to political and policy considerations that have played out behind the scenes over months.
