So, the politically connected academic who has made millions selling access to Wall Street banks, Larry Summers, has decided that real systemic regulation is necessary in the American financial system:

“Financial institutions that have benefited from government support can, should and must use this moment to think about what they can do for their country — by accepting the necessary regulation to protect the American people,” Summers said in remarks prepared for delivery at the Economist’s Buttonwood Gathering in New York. “There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system.”

What’s more, his comments appear to be a part of deliberate push-back from the White House against the financial sector, where unnamed officials are describing themselves as “frustrated“.

Given who is working this issue *cough* Geithner and Summers *cough*, I have to conclude that this is being driven by political considerations, Obama has finally realized the depth and breadth of the anger against the banks and their lavish pay packages, and understands that there is a real political cost, one that will be born by the Democratic Party generally, and Barack Obama in particular, if the Wall Street banks continue to be what they are.