The Fight to Rein in the Banks
In January 2009, Barack Obama was inaugurated as the forty-fourth president of the United States and handed a financial calamity that almost everybody believed was caused by banks run amok. In the same month, Paul A. Volcker first went public with his idea to split banking from risky trading to put a safe distance between the banks that the average American trusts to guard his money and those gambling on everything from the weather patterns in Africa to interest rates in Malaysia.
Although Volcker had been among Obama’s circle of economic advisors during the election campaign, his groundbreaking idea didn’t get much attention from the new president or his top economic brass initially. In fact, Volcker ...