Obama, the Congress, everyone on Wall Street (that they care about) opposes it, and the political will just isn't there. It was possible 6 months ago when the banks were begging for survival, but that horse is well out of the barn.

The only big radical variable here would be if healthcare with a strongish public option passes congress that emboldens progressives to push on breaking up the banks and reapplying Glass-Stegal. But economics is not healthcare. Everyone can understand that children get sick and die without access to medical care and that high costs can bankrupt a perfectly functional family. Trying to explain investment banking vs. commercial banking, CDOs, leverage, and anti-trust law to the average American is a tall order. They really just don't care as long as the system can keep chugging along (even if it is limping along.) Many can't understand the mortgage they signed their name and wealth to, they want to think about economics as little as is humanly possible.

My guess is the time to have this reform is after the next big ass whoopin', when the banks return to the public feeder bar for survival. This is a good time to push for strong action though, as it sets it up for possible real reform later. But if you expect results, don't be too disappointed if it goes nowhere (super fast.)

There was a great post by Stirling Newberry back in July (http://www.correntewire.com/three_polar_politics_post_petroleum_america) in which he detailed the three sided shape of American politics. With that as background the breakup of the banks (as a rejection of TARP would have succeeded in doing for Obama last September-October) would help to reforge the old Confederate - Progressive consensus that was the basis for FDR's political power.

I was afraid last Fall that Obama was either missing or choosing not to take this enormous political opportunity and have become convinced since that it was a matter of choice that he won't back down from.

Again opportunities lost.

The European banking industry's second great overhaul within a year is under way.

The first, launched after the collapse of Lehman Brothers 13 months ago, saw European Union (EU) governments prop up dozens of banks that faced imminent collapse. The second will require many of the bailed-out banks to undergo radical restructurings to reduce their risk exposure and ensure the state aid doesn't give them an unfair competitive advantage.

ING Groep NV , the Dutch banking and insurance giant, started the overhaul with a bang yesterday with the announcement that it will raise €7.5-billion ($11.9-billion) in a rights offering and sell its insurance businesses. The split marks the end of ING's grand bancassurance model, launched in the early 1990s, that assumed bankers and insurers could create value by cross-selling each other's products in a new financial services supermarket.
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