About a week after the Securities and Exchanges Commission accused Wall Street giant Goldman Sachs of fraud, President Barack Obama gave a speech on Thursday promoting two much-debated financial regulation bills, one of which has already passed the House of Representatives, while the other is still being discussed in the Senate.
Obama returned to Cooper Union in the financial district of New York, where he had spoken about financial reform in Wall Street, and explained the four main aims of the new bill, which politicians across the country have long said is needed.
The reforms, he said in his remarks, are ones “that would put an end to taxpayer bailouts; that would bring complex financial dealings out of the shadows; that would protect consumers; and that would give shareholders more power in the financial system.”
One of the main problems currently facing the financial system, Obama said, is that no Wall Street powerhouses like AIG have the regulations and processes that ordinary local banks have through the Federal Deposit Insurance Corporation.
“Both bills [in the Senate and the House] represent significant improvement on the flawed rules that we have in place today, despite the furious effort of industry lobbyists to shape this legislation to their special interests,” Obama said.
But Obama didn’t only criticize Wall Street lobbyists and leaders; instead he called on their support of the bill not only for the good of the industry but for the good of the country.
Obama also called for the unity of Democrats and Republicans in the debate that has gotten Wall Street titans fixated.
“There’s a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process. And that’s a legitimate debate, and I encourage that debate. But what’s not legitimate is to suggest that somehow the legislation being proposed is going to encourage future taxpayer bailouts, as some have claimed,” he said.
All Republicans in the Senate, including Massachusetts Sen. Scott Brown, have said in a letter that they would not support the bill in its current form, though some question whether they will really keep their stance with upcoming elections and the need to regain popularity after being quoted as the party of “no” in the health care reform.
“It is time once and for all to bury the flawed policy of “Too Big to Fail,'” Sen. Richard Shelby, R-Ala., said in an April 14 statement. “Unfortunately, Democrats’ financial reform proposals would not correct this problem. The current Senate bill would allow for backdoor bailouts, expands the scope of bailouts, and institutionalize “Too Big to Fail.'”
Still, Shelby said April 25 on NBC’s “Meet the Press” that he was optimistic about the efforts Democrats and Republicans were making to improve the bill.
“We are working closely together. I think we’re conceptually very, very close,” he said.
Obama however, asked for “cynical politics” to stand out of the way of any financial regulation reform bill.
“The system as it stands is what led to a series of massive, costly taxpayer bailouts. And it’s only with reform that we can avoid a similar outcome in the future,” he said. “In other words, a vote for reform is a vote to put a stop to taxpayer-funded bailouts. That’s the truth. End of story.”
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