Obama Targets Wall Street... Again

President Barack Obama is expected to propose news restrictions on the nation's biggest banks on Thursday that have not been seen since the Great Depression, according to a report in the Wall Street Journal.

The move could curb the ability for banks to consolidate the way they have in the past decade that has scene enormous financial entities emerge. The government would permanently constrain the size and nature of banking according to the report.

One proposal would force the banks to separate underwriting and trading from traditional businesses, which make loans and take deposits

The idea behind the proposal would be to keep banks from so large that they create risk to the broader economy and so they are not able to force out or simply acquire smaller competitors. The limits that Obama intends to propose were not available, but it is expected that the President will spell out the exact limits.

The institutions that would potentially impacted the most would be Bank of America Corp. (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), J.P. Morgan Chase & Co. (NYSE: JPM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and Citigroup Inc. (NYSE: C) which currently have a great impact on Wall Street.

The financial system saw major consolidation during the financial crisis. Now there are a few major conglomerates that control an unprecedented market share in the businesses of mortgages, credit cards and deposit taking.

The proposal could stop banks from being in the business of running hedge funds and investing in real estate or private equity.

While the proposal will bring back some of the ideas placed by the Glass Steagall Act during the Great Depression, it will not resurrect the entirely the act that was repealed in 1999.

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