Hampel: Obama plan limits banks' ability to woo customers
WASHINGTON (1/22/10)--President Barack Obama's plans to limit big banks' size and trading capabilities will also limit their ability to woo new customers, Bill Hampel, chief economist at the Credit Union National Association, told Associated Press Thursday after the president's announcement.
Obama's proposal will involve tougher regulations to head off more and more failures that required bailout funds. They would include restricting banks in the use of depositor money and limiting how big banks they can become.
Hampel said that big banks under new rules may have a limited ability to court new customers aggressively because they would not be able to cover better pricing on the retail side with as much revenue from trading.
The new rules mean national banks would lose the tools that have helped them off-set huge loan losses the past year, but those tools are also the same ones that created their problems in the first place.
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