Jan. 20 (Bloomberg) -- President Barack Obama tomorrow will offer proposals to limit the size and complexity of financial institutions’ proprietary trading as a way to reduce risk- taking, an administration official said.
Obama will announce the rules after he meets with former Federal Reserve Chairman Paul Volcker at the White House. The proposals will be part of an overhaul of regulations to help limit the size of financial institutions, the official said on the condition of anonymity.
Banks conduct proprietary trading for their own benefit, not for that of their clients.
“We’ve got a financial regulatory system that is completely inadequate to control the excessive risks and irresponsible behavior of financial players all around the world,” Obama said in an interview with ABC News broadcast tonight.
Obama is renewing his focus on economic issues in an effort to tap into voter anger about the struggling economy and over taxpayer bailouts and growing bank profits.
That anger helped Republican Scott Brown win the late Edward Kennedy’s U.S. Senate seat in Massachusetts this week, giving Republicans the ability to block Obama’s top legislative priority, a health-care overhaul. The Massachusetts seat had been held by Democrats for more than 50 years.
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