Given that, they must take the steps necessary to ensure this health. This is a profound shift in priorities -- the banking sector was normally governed on the basis that the best outcome was increased profit-making opportunity. The Obama administration, with its predilection for increased regulation, realizes that the best outcome for the banking industry, its executives and its shareholders is not necessarily the best outcome for the nation as a whole.

It is interesting that the only major change to Fed policy was with respect to its bailout of AIG. The Federal Reserve Bank of New York funneled AIG $85 billion to keep that company out of bankruptcy, a move seen as essential to the preservation of the global financial system. Necessary or not, the move was unprecedented and marked new territory for Fed policy. The Fed's approach to monetary policy, on the other hand, has not changed. They...
[ View Full Essay]