"Wake up Gentlemen:" Paul Volcker has landed

Expect some big financial news out of Washington today: it looks like President Obama is set to publicly support the "Volcker banking plan." Paul Volcker has been pushing this approach for some time (Mervyn King has been doing something similar in the UK), but this is the first time he appears to be getting public support from his boss. Broadly speaking, Volcker's goal is to split the potentially contradictory activities of major banks:

"On the one hand, they are commercial banks, taking deposits, making standard loans and managing the nation’s payment system. On the other hand, they trade securities for their own accounts, a hugely profitable endeavor. This proprietary trading, mainly in risky mortgage-backed securities, precipitated the credit crisis in 2008 and the federal bailout..... Under the new approach, commercial banks would no longer be allowed to engage in proprietary trading, using customers’ deposits and borrowed money to carry out these trades."

Simon Johnson provides some cheerleading; Tyler Cowen provides a list of questions to ask yourself when the new plan emerges. Should be fun.

UPDATE: oh my goodness, oh my goodness, oh my goodness! Press release is here.