Barack Obama: "We intend to pass regulatory reform through Congress"
US President Barack Obama has warned bankers against complacency, saying that some in the industry are ignoring the lessons of the financial crisis.
"We will not go back to the days of reckless behaviour and unchecked excess at the heart of this crisis," he said.
He called on Wall Street to support "the most ambitious overhaul of the financial system since the Great Depression".
The financial system was returning to normal but had not recovered, he added.
"There are some in the financial industry who are misreading this moment," said President Obama in a speech to mark one year since the collapse of Lehman Brothers bank.
"Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them. They do so not just at their own peril, but at our nation's."
OBAMA'S AUTUMN CHALLENGE
Financial regulation: Mr Obama wants to tighten the rules governing the banking system, but his reforms could face opposition on Wall Street, and when bankers complain, lawmakers listen.
Healthcare: Will enough senators vote through Mr Obama's ambitious health bill - and will it include a publicly-run insurance scheme?
Climate change: A bill establishing a "cap-and-trade" scheme for carbon emissions has passed through the House of Representatives, but senators from coal-producing states threaten to derail its passage through the upper chamber.
He told Wall Street that it could not resume taking risks without regard for consequences and said they should not expect US taxpayers to bail them out again.
The speech came as UK Prime Minister Gordon Brown said that he was "appalled" that some financial firms had been continuing or even extending their bonus culture.
In a BBC interview, Mr Brown said he was determined that world leaders meeting in Pittsburgh next week would "complete the unfinished business" of cleaning up banks - including establishing rules on bonuses.
President Obama said his administration was working on an "ambitious" overhaul of the regulatory system.
BBC AFTERSHOCK SEASON
The BBC reports on the first anniversary of the credit crunch across radio, TV, and online.
Under the proposed regulation, the White House would give the central bank, the Federal Reserve, new powers over huge financial firms and the ability to seize banks whose collapse could threaten the economy.
He also wants a new watchdog, the Consumer Financial Protection Agency, to oversee products such as mortgages, car loans and credit cards. The Federal Trade Commission would also be given new powers to protect consumers.
"It is incumbent on us to put in place those reforms that will prevent this crisis from ever happening again," President Obama said.
The proposals have faced opposition from the banking industry and been tied up in Congress, which has been bogged down with the administration's healthcare reform proposals.
Mr Obama said that his recovery was bearing fruit and had "prevented layoffs of tens of thousands of teachers, police officers and other essential public servants".
"Although I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," he added.
He denied that his plans to force greater transparency in financial products would lead to a reduction in competition.
He said that in the past competition had been about who could hide the true costs of their products the best by offering teaser rates on credit cards and mortgages.
"By setting ground rules, we'll increase the kind of competition that actually provides people better and greater choices, as companies compete to offer the best product, not the one that's most complex or confusing," he said.
US MEDIA REACTION TO OBAMA'S SPEECH
The President is trying to breathe new life into financial reform. He's using the anniversary of the death of Lehman Brothers and the near-death experience of the rest of the Street, culminating with a $600bn taxpayer-financed bailout, to summon the political will for change. Yet the prospects seem dubious. As with healthcare reform, he has stood on the sidelines for months and allowed vested interests to frame the debate. Nor has he come up with a sufficiently bold or coherent set of reforms likely to change the way the Street does business, even if enacted.
It's getting to the point where it makes little sense to listen to the President speak. He speaks in broad generalities about laws and regulations he wants to enact. Often the generalities are such that they are difficult to argue with in the manner he presents them. For example, he says he wants to protect against future crises, like the kind we have now. Well yeah, who wouldn't? But the devil is in the details, which the president never discusses.
The intended audience appeared to be Wall Street rather than Main Street. It was an interesting choice, and potentially indicative of how the administration views the challenges facing it in Congress. The legislative effort seems likely to... primarily be a conversation between financial elites and political elites. Main Street tuned out awhile ago, and no one seems much interested in ushering them back into the conversation.
The President went to Wall Street today and said... well, nothing new, really. The substance of his speech was that Congress ought to pass all those financial reforms the Treasury Department proposed a few months back. Actually he said near the end of the speech that the reforms "will pass". Want to put some money on that?
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