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Crisis watch

Prospect’s top public intellectual of the financial crisis welcomes the fact that Barack Obama is finally getting tough on US banks

By Simon Johnson   February 2010

At last the Obama administration seems to be contemplating a decisive move against America’s banking elite. Following the recent electoral setback in Massachusetts the proposals laid down by former Federal Reserve chairman, Paul Volcker, to reduce the market power of the banks, are being dusted off.

Until now it has been a very different story—essentially a victory for the big banks since spring 2009, when some of the healthier ones were allowed to start paying back any funds they had drawn from the US treasury’s Troubled Asset Relief Programme. That, in turn, allowed them to escape even the very weak…

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