What Obama's bank reforms really mean
President Obama certainly brought the recession to an end for political lobbyists yesterday.
In the past year, Wall Street spent around $500m on lobbying and in contributions to US legislators. That will probably sky-rocket this year, as Wall Street battles to prevent President Obama's proposals to break up the big banks from being passed into law by Congress (and as luck would have it, only yesterday the Supreme Court abolished the ceiling on campaign contributions by corporates).
But let's assume that the president's reforms stand a better than evens chance of being implemented in some form or other, simply because the banks have done such an impressive job of alienating themselves from the public.
What would it mean for there to be a prohibition on banks' involvement in running hedge funds, private equity and proprietary trading, and a new limit on the size of banks?
Well it depends on whether President Obama is using words with regulatory precision, or whether it is the spirit of the plans that matter.
Actually in the US, that distinction is less important: what he has in mind would plainly lead to a complete reconfiguration of the likes of JP Morgan, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs.
Goldman Sachs and Morgan Stanley would have the option of escaping the constraints by giving up their newly won banking status. But if that also deprived them of access to emergency funding by the US central bank, the Federal Reserve, well they would probably find that it became much more expensive for them to borrow (because creditors would see them as a much worse credit risk).
And that would significantly impair their profitability.
By contrast, in the UK that distinction between letter and spirit would be crucial. Because none of our banks are huge in the areas spelled out by Obama: Barclays has a private-equity fund specialising in the takeover of medium-size companies and tells me it closed down its prop trading desk a few years ago; RBS announced a few months ago it would be pulling out of prop trading.
If however Obama means - in a more general sense - that he wants to prevent banks that receive any kind of explicit or implicit taxpayer support from speculating for their own account and benefit, rather than on behalf of clients, well that would represent a profound cultural and economic shift for all the world's biggest banks.
The market seems to think that what Obama has in mind is specific rather than general - so Barclays' shares this morning have fallen just a bit, and RBS's are almost unchanged.
But that may be naive. Bankers tell me that they recognise Obama's intervention has profoundly changed the weather for international negotiations on the future of banking.
If America has abandoned its conservative approach to bank reform, which it has, there is a substantial probability that the model of the universal bank - one that takes substantial speculative risks underpinned by the insurance of emergency funding from a central bank and with access to cheap insured retail deposits - will be killed off.
Which is not the same thing as saying that the world will divide into pure retail banks and pure investment banks. The French, Germans and Swiss - with their long universal-banking traditions - will probably resist such a bifurcated banking industry with every last breath in their bodies.
But I think we can assume that in a general sense banks will be forced to go back to the basics of making money from the long-term risks of lending. Their involvement as traders on their own behalf in liquid markets will be reduced. And their role as providers of equity or quasi-equity to businesses from their own funds will diminish.
However let's be under no illusion that such reform would immediately sanitise financial markets for generations. It would serve as a spur to what has become known as shadow banking.
Much of the speculative risk-taking and clever-clever financial innovation would be driven out of banks and into proxy banks - and unless these proxy banks were supervised and regulated as closely as banks, chances are that the next financial crisis would simply have been shipped to institutions with different names (structured investment vehicles, hedge funds and so on).
Finally, as the shadow chancellor George Osborne said this morning, there may not be any point in the UK leaping ahead of the US with a unilateral reform agenda.
If a UK government massively restricted the activities of British banks in a way that was very different from the constraints of their overseas competitors, you can probably guess what British banks would do.
There's a fair chance that Barclays would move its legal home to Dublin or Amsterdam (where it almost went, when negotiating to buy ABN Amro a few years ago), Standard Chartered would up sticks to Singapore and HSBC could relocate to Hong Kong.
Only Royal Bank and Lloyds would be unable to budge, because the state as the biggest shareholder could order them to stay put.
The share prices of European banks, from Barclays and RBS to Deutsche and Credit Suisse, have now fallen quite sharply.
Which implies that investors have clocked the general significance of Obama's readiness to have a serious scrap with banks.
it means, as I noted earlier, that the global climate for bank reform has been changed by the American president very considerably, and not in a way that favours the status quo.