Today, one week after proposing the imposition of a “financial crisis responsibility fee” on large financial services companies, President Obama called broadly for new restrictions on the size and scope of banks and other financial institutions in an effort to control excessive risk taking and protect taxpayers. The proposal so far lacks details that would indicate how the restrictions might be implemented. In any event, the President’s proposed restrictions would prohibit any bank or bank holding company from owning, investing in or sponsoring a hedge fund or private equity fund or engaging in any proprietary trading operations unrelated to serving customers for its own profits. The President also proposed to supplement existing caps on bank deposit market shares with “broader limits on the excessive growth of the market share of liabilities at the largest financial firms,” suggesting that the current 10% cap on nationwide deposits might be changed. The President’s announcement indicates a desire to include these new restrictions in comprehensive financial industry reform legislation currently under consideration in the Senate, noting that the “groundwork” for these proposed reforms was laid by the legislation proposed by Chairman Barney Frank (D-MA) and passed by the House in December, which would authorize “regulators to restrict or prohibit large firms from engaging in excessively risky activities.” With Senate legislation still pending, however, today’s proposal will be debated at length and the result of that debate incorporated in a Senate bill.