22
Apr
10

President Obama seeks reform buy-in from Wall Street

NEWS
President Obama seeks reform buy-in from Wall Street
The President Speaks to Wall Street, Republicans, and All of America

Thursday, April 22, 2010

Barack Obama has railed at unfettered corporate greed as he laced a defining pitch for U.S. financial reform with stark warnings of future economic meltdowns if the bid fails.

Just blocks from Wall Street, the epicentre of high finance in the United States, the president sent a tough message to financial barons, American voters and Republican opponents critical of his plans.

Obama recalled how he had visited the historic college at Cooper Union during his election campaign to warn of the dangers of corporate excess.

‘And I take no satisfaction in noting that my comments then have largely been borne out by the events that followed,’ he told an audience of banking notables, including Lloyd Blankfein, chief executive of fraud-tainted titan Goldman Sachs, on Thursday.

‘But I repeat what I said then, because it is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat them. Make no mistake, that is exactly what will happen if we allow this moment to pass.’

Obama assured investors he believed in the ‘power of the free market’ and a ‘strong financial sector that helps people to raise capital and get loans and invest their savings’.

‘But a free market was never meant to be a free licence to take whatever you can get, however you can get it.

‘Some on Wall Street forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, to pay for an education, open a business, save for retirement.

‘What happens on Wall Street has real consequences across the country, across our economy.’

Obama urged Wall Street bosses to call off armies of lobbyists trying to thwart what he has promised will be the most sweeping regulatory reform drive since the 1930s Great Depression.

As Democrats and Republicans spar over the final shape of the financial regulatory legislation, Obama argued that middle-ground could be found on the draft law.

Plans include protections for taxpayers should one financial institution pose a systemic risk to the whole economy if it failed, and limits on the size of corporate entities.

‘A vote for reform is a vote to put a stop to taxpayer-funded bailouts,’ Obama said. ‘The goal is to make certain that taxpayers are never again on the hook because a firm is deemed too big to fail.’

Obama also called for stronger protections for consumers and greater transparency by bringing risky financial instruments such as derivatives out into the open.

His efforts got a boost on Wednesday, when a Senate panel approved new restrictions on derivatives, a complex financial instrument blamed for partly igniting the meltdown from which America is just emerging.

Obama’s Democrats needs to peel away at least one vote from Republicans in a final vote in the full Senate, which could come within weeks.

Polls show Americans, though highly suspicious of government, support efforts to rein in Wall Street.

Obama’s financial reform effort is reaching a climax after regulators slapped civil fraud charges on finance titan Goldman.

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