Friday, January 29, 2010

George Soros: Obama’s plans are premature

George Soros has welcomed US President Obama’s plans to limit the size of financial institutions in the US but has warned that the timing of their implementation maybe premature.
George Soros: Obama’s plans are premature

The investor made the comments at a meeting at the World Economic Forum in Davos.

Mr Soros said that he was “very supportive” of the proposals to tax the banking industry to reclaim tax payer money used to bail out ailing institutions during the global economic crisis.

However, he stated that the implementation of the levy should be delayed until banks and companies are more financially stable.

Obama’s plans will affect financial institutions with over $50,000 worth of assets and are expected to raise as much as $90 billion over the next ten years.

The reforms also include preventing commercial banks from investing in private equity firms or hedge funds.

However, this new rule may mean “some banks will spin off their investment banks and they will be very substantial and they will be too big to fail,” Mr Soros warned.

The hedge fund investor also criticised those bankers opposing the reforms, describing them as “tone deaf”.

According to Soros, the global crisis was the result of a “super bubble” created by the banking system and built up from 25 years worth of smaller bubbles.

By Jim Ottewill (January 29, 2010)

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