Obama, banks and the general election
President Obama's speech on the urgent need for financial reform was perhaps less striking for what he said, and all the more for how he said it, where he said it, and to whom he said it.
The shape of his programme to make safe America's banking system has been known for some months.
(a) set up an autonomous consumer-protection agency;
(b) give more power to shareholders to determine who runs the banks and what they're paid;
(c) put in place resolution procedures to protect taxpayers when the biggest financial institutions run into difficulties;
(d) introduce greater transparency into the trading of derivatives by directing trades through centralised clearing houses, and
(e) limit the size of banks and place limits on the ability to speculate for their own account of those that take retail deposits.
Obama was giving a push to the central elements in his programme as the progress of legislation in the Senate reaches a crucial stage.
Within a very short walk of Wall Street, and in a room which contained Lloyd Blankfein, chairman of Goldman Sachs, Bob Diamond, president of Barclays, and senior representatives of Morgan Stanley and JP Morgan, among others, he urged the big banks to surrender their arms, to temper their ferocious lobbying against the proposed changes.
This is what he said:
"To those of you who are in the financial sector, let me say this: we will not always see eye-to-eye. We will not always agree. But that doesn't mean that we've got to choose between two extremes. We do not have to choose between markets that are unfettered by even modest protections against crisis, or markets that are stymied by onerous rules that suppress enterprise and innovation. That is a false choice. And we need no more proof than the crisis that we've just been through."
Now although the rhetoric of Gordon Brown, George Osborne and Vince Cable has become increasingly critical of some banks and bankers, I don't recall any of the leaders of the main parties venturing into the City to deliver a public sermon to the grandees about the duties that must accompany their rights.
Also, some will say that there's a boldness to what Obama is proposing that we haven't yet seen in UK legislation - which to date has focussed on the palpable flaws exposed by the collapse of Northern Rock, such as the unsuitability of traditional insolvency legislation for dealing with banks that run into difficulties, and the fuzzy relationship between the Financial Services Authority, the Bank of England and the Treasury.
That said, the FSA already has a consumer-protection arm (which the Tories would like to hive off, as part of its plan to crunch the main supervisory part of the FSA into the Bank of England). Also, shareholders in British companies have greater rights than owners of American businesses to influence executive remuneration.
But what about breaking up banks and limiting their size? Well, the government is set against that.
In last night's prime-ministerial debate, I thought one of the more riveting exchanges was between a PM who defended that status quo and a Liberal Democrat leader who would like to shrink and dismember them.
Gordon Brown's factually true statement was that Northern Rock did quite a lot of damage when it collapsed, and it was not a super-conglomerate bank of the size and sort that Obama and Clegg would like to cut down to size.
That said, most would argue that it wasn't Northern Rock's difficulties which put a bomb under the British economy. The direct fiscal costs of nationalising it were relatively small, a few billion pounds (although taxpayer loans to the bank were around £30bn at the peak).
It was the much bigger and more diversified banks, Royal Bank of Scotland and HBOS, that wreaked havoc when they went to the brink of collapse. And saving them required tens of billions of pounds of direct investment by taxpayers and hundreds of billions of pounds of state guarantees and loans (mostly to them, but also to other giant mega banks, such as Barclays).
The pertinent issue is how to prevent the likes of Royal Bank of Scotland and HBOS holding taxpayers and the economy to ransom.
Right now, in the UK, the battle lines on this aren't perhaps what you'd expect.
There is an intriguing alliance between the Lib Dems and the Bank of England, which believe there's a strong case for physically separating investment banking from retailing banking. Ranged against them is the Labour government and the Financial Services Authority, which argue that investment banking can be made safe, even when owned by a conglomerate engaged in retail banking, by massively increasing the capital the banks have to hold against their trading books as a buffer against losses.
By the way, both sides are fans of so-called living wills, or explicit, legally binding arrangements for protecting and hiving off retail deposits in the bigger banks when they face ruin.
Where do the Tories stand on this? Well, their public position is that they're in favour of some dismantling of banks so long as that's what happens in important competitor nations.
But in practice they are probably closer to Clegg and Cable than they would care to admit.
How so? Well Osborne and Cameron are - as I've said - committed to giving much more power to the Bank of England over the supervision and regulation of banks. And they would transfer these powers while knowing that the Governor of the Bank of England, Mervyn King, believes that there may be no credible alternative to breaking up the banks.