Bank proposals germinate quick reactions

Morgan Stanley's shares fell 6.6 percent after the Thursday announcement. Bank of America's share values dropped 6.2 percent. At Citigroup, shares slid 5.5 percent, The New York Times reported.

Obama proposed banning commercial banks -- banks with federally insured consumer deposits -- from making risky investments with their own money. He also proposed extending a cap, set at 10 percent, on the share of insured deposits to other bank liabilities, effectively limiting the size of banks.
The Buckingham Research Group estimated that among the larger banks Goldman Sachs stood to lose the most revenue if the proposals find enough votes in Congress.

But the bank's Chief Financial Officer David Viniar said in a conference call that Goldman Sachs could survive if the changes became law.

"I would say pure walled-off proprietary-trading businesses at Goldman Sachs are not very big in the context of the firm," he said.

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