Those who believe that additional regulatory measures are necessary have mostly turned to structural measures, as distinguished from the prudential requirements, supervisory initiatives, and market discipline proposals that constitute the bulk of the consensus reform agenda. One approach is to reverse the 30-year trend that allowed progressively more financial activities within commercial banks and more affiliations with nonbank financial firms.
The idea, promoted by former Federal Reserve Chairman Paul Volcker and now endorsed by the Administration, is to insulate insured depository institutions from proprietary trading or similar capital market activities that are thought to pose unusually high risks for institutions or, more precisely, for the federal safety net provided to insured banks.