Naked Capitalism Link of the Day

Today's link: British Bank Proposal Expected to Include Stiff Rules, at the NYT:

While British regulators are expected to propose that banks make structural changes to defuse the threat from institutions considered too big to fail, their counterparts in Washington have focused on putting in place shock absorbers to mitigate the effects of another financial crisis. These American rules include making banks hold more capital to cushion unexpected losses and giving new legal powers for regulators to help failing financial institutions unwind in a way that does not threaten the entire system.
Despite all the complaints from Wall Street about Dodd-Frank, several British institutions have hinted that they might move their base of operations to New York from London. By contrast, the veiled threats by American banks that they might go elsewhere, voiced when the Dodd-Frank legislation was being debated, never gained traction.
Last week, Robert E. Diamond Jr., the chief executive of Barclays, issued a full-throated defense of keeping risky investment banking and safe deposit-taking under the same roof.
“It’s the model,” he said, “that’s enabled us to build a bank that’s diversified by business, by geography, by customers and by funding sources.”
But leaders of the commission have already called into question the argument — a core maxim of international banking — that universal banks like Barclays in Britain and Bank of America in the United States provide a public benefit because of their size, diverse range of services and ability to attract low-cost capital.

What's funny is that even though Dodd-Frank isn't nearly restrictive enough, Republicans and their bank backers want to dismantle it.  My feeling is that we ought to return to Glass-Steagall and restrict commercial banks from investment banking and vice versa.  Goldman and Citigroup will squeal like stuck pigs, but let them, they would have died without the government and the Fed in 2008.