Page last updated at 21:43 GMT, Friday, 9 October 2009 22:43 UK

Obama defends new consumer agency

President Barack Obama
The president wants to introduce wide ranging reforms to the financial system

US President Barack Obama has launched a staunch defence of his proposed new agency to protect the interests of the American consumer.

Mr Obama said it was more important than ever to have a new consumer watchdog, and accused vested interests of trying to scupper reform.

He accused the US Chamber of Commerce of trying to "kill" plans for the Consumer Financial Protection Agency.

The president was talking on the day he received the Nobel Peace Prize.

More protection

His administration has proposed a number of regulatory reforms designed to prevent another financial crisis.

One of them is to create a new consumer agency to regulate products such as credit cards and mortgages.

It would also force banks to offer low-risk, standard versions of these products.

"Predictably, a lot of banks and big financial firms don't like the idea of a consumer agency very much," Mr Obama said.

"They're doing what they always do - using every bit of influence to maintain the status quo that has maximised their profits at the expense of American consumers.

"In fact, the US Chamber of Commerce is spending millions on an ad campaign to kill it."

But the president said he would not back down from his plans for reform. He said the new agency was needed to protect US consumers from "ridiculously confusing contracts" used by financial institutions.

"We have already seen and lived the consequences of what happens when there is too little accountability on Wall Street and too little protection on Main Street, and I will not allow this country to go back there," he said.

The White House also wants to give the central bank, the Federal Reserve, new powers over big financial firms, including the ability to seize banks whose collapse could threaten the economy.

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