The federal government has taken over large swaths of consumer lending, most notably the $10 trillion home mortgage and $1 trillion student lending markets. The government's share of new loans for each now approaches 100%.Government monopolies in financial services pose risks to taxpayers as well as borrowers

In 2011, the Government Mortgage Complex accounted for 88 percent of all first-mortgage originations in the United States, with the government also controlling an estimated 90 percent of the student loan market. The government’s growing dominance in the home mortgage and student loan categories is cause for concern, posing a threat to private investors, borrowers, and taxpayers.

The $2 billion loss at JPMorgan Chase (JPM) has reopened debate on the Volcker rule. The proponents of the rule have seized on the story as proof that the Volcker rule is necessary and should be quickly put into effect by regulation. In reality, however, if the facts are as thus far reported, what happened at JPMorgan is proof that the Volcker rule is unworkable and should be repealed. 

From the perspective of the corporate profit and loss statement, a trading loss is one expense item in the context of all revenues and expenses. So $2 billion should be compared to the bank's $26.7 billion in pretax profits for 2011, suggesting a reduction of something less than 10 percent in annual profit.

This event will address the problems and improvements needed for student loans, beginning with a keynote presentation by former secretary of education Bill Bennett.

The Federal Reserve recently released detailed data on its financial rescue activities as required under the new Dodd-Frank Act. The information covers nine special lending and related facilities and the programs related to the acquisition of Bear Stearns and assistance given to AIG during the financial crisis. 

Rapid growth in the P2P industry has given rise to concerns over appropriate regulation of this alternative form of lending.

A fair settlement could facilitate the restart of lending and help accelerate the repair of the housing sector. But if President Obama successfully capitalizes on a deal, banks may be inviting four more years of his anti-Wall Street agenda.