Friday, 1 July 2016
Last updated 12 hours ago
Jan 28 2010 | 12:25pm ET
President Barack Obama’s bid to keep banks out of the alternative investments business won a pair of high-profile endorsements yesterday at the World Economic Forum in Davos, Switzerland.
In a widely-anticipated speech on reforming capitalism, French President Nicolas Sarkozy praised Obama’s plan to forbid bank holding companies from owning, investing in or sponsoring hedge funds and private equity funds. But he warned that the U.S. cannot go it alone in imposing such strict new rules.
“President Obama is right when he says that banks must be dissuaded from engaging in proprietary speculation or financing speculative funds,” Sarkozy said. “But this debate cannot be confined to a single country, whatever its weight in global finance. This debate must be settled within the G20.”
Sarkozy’s support for Obama’s proposals, which would also block banks from proprietary trading, was echoed by Britain’s top regulator. Adair Turner, the chairman of the U.K. Financial Services Authority—a body that does not often see eye-to-eye with its neighbors across the English Channel—said he backed Obama’s plan to end proprietary trading at banks, and might even support the separation of banking from alternative investment activities.
The British government has been a good deal less supportive of the Obama plan: It has been explicitly rejected by Prime Minister Gordon Brown, although it has been embraced by the opposition Conservative Party.