Off-Topic: Banks need regulation

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	Name:	GoneFishin -
	Subject:	Banks need regulation
	Date:	1/23/2010 5:48:03 PM

Martini, read what I wrote about AIG "AIG Insurance remains solid which is different from the holding company that received the bailout through risky unregulated investments." We agree on that point totally.

As to Goldman, I am sure you are aware they became a bank holding company in Sept 2008 similar to Citi, Chase, Wells, etc. If banks are the most regulated industry, why did they convert? They wanted some of the protection from Treasury. The following is an exerpt that outlines one possibility for Goldman and Margan Stanley to avoid the additional regulations:

"President Obama wants to limit the scope of risk-taking by barring banks with federally insured deposits from trading securities for their own accounts and from owning hedge funds and private equity funds. The plan, policy makers said on Friday, would effectively require bank holding companies — which Goldman and Morgan became at the height of the financial crisis — to divest themselves of these lucrative operations.

But Treasury Department officials are also seeking to give banks that do not like the proposed rules the option of dropping their status as holding companies to keep their trading and other investment businesses.

The move is likely to turn the spotlight on Goldman, which could be one of the biggest potential beneficiaries because it makes sizable profits from proprietary trading and runs many private equity and hedge funds. Goldman traders are known for taking large trading positions, even as they manage trades for clients."