Obama plan could trim back financial power houses:

Under the administration's proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.

They also would have to anticipate their own demise, drafting detailed descriptions of how they could be dismantled quickly without causing damaging repercussions. Think of it as planning their own funerals — and burials.

Obama's plan, in short, aims to make it far less appealing to be so big. That was the middle ground the administration sought, a step short of an outright ban on systemically risky companies.

This is an interesting idea. I wouldn't mind seeing some of these entities cut down to size, as no company should be too big to fail. However, I don't see Congress being very active on this issue, since they shovel in so much money from the financial powerhouses. Plus, they are the ones that specifically passed legislation to allow them to get so big in the first place.

What acts caused this to happen, you may wonder? Well, for starters, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 repealed key provisions of the Bank Holding Company Act of 1956, allowing interstate mergers between adequately capitalized banks, up to certain limits. One such limit was the ten percent rule, which stated that no BHC could hold more than ten percent of bank deposits nationwide. Within ten years, Bank of America was up to 9.8%.

Then there was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, in 1999, allowing financial companies, BHCs, and insurance companies to merge. The biggest instigator of this change was Citigroup, which wanted to acquire Traveler's Insurance but couldn't. Didn't you ever wonder why Robert Rubin worked there following the end of the Clinton Presidency until last year?

These two acts alone are responsible for the majority of the consolidation that has occured in the last fifteen years. Everyone likes to blame Phil Gramm, and he holds some responsibility, but the 1999 Act passed by huge majorities and was signed by the President, while the 1994 Act was a Democratic-led initiative. There is plenty of blame to go around. This is why we should throw ALL the bums out in the next election. The corporate giants have too much influence to enact real change these days.