Obama's bank curbs mean uncertainty for markets

Barack Obama's surprise crackdown on banks last week was 'the last thing that world investors needed'. And with elections coming up on both sides of the Atlantic this year, there is still scope for more reforms.

Barack Obama's surprise crackdown on banks last week was "the last thing that world investors needed", said Jeremy Gaunt on Reuters.

Risk appetite was already suffering due to Greek debt problems and China's clampdown on bank lending. Then on Thursday, Obama announced the 'Volcker rule'. Banks with a deposit base guaranteed by the government will not be allowed to own or invest in hedge funds and private equity, or punt their own capital. There will be further curbs on a single bank's size to tackle the danger of any being 'too big to fail'. Longer term, such reform looks sensible. But for now, it adds a "huge dollop" of protracted uncertainty, says Gaunt.

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