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What new bank regulations would do

January 22, 2010

Stricter rules

President Obama's latest proposal to reform the financial industry would revive provisions of the repealed Glass-Steagall Act, which required a separation of commercial banks and investment banks. The proposal would:

* Limit the scope of investments by forbidding any financial institution that owns a commercial bank from owning, investing in or sponsoring a hedge fund, a private equity fund or proprietary trading operations -- unrelated to serving customers -- for its own profit.

* Limit the size of financial institutions by placing broader caps on deposits and other liabilities at the largest financial firms.

Source: U.S. Treasury Department

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