Asia-Pacific
Obama scolds Wall Street for fighting reform
(Agencies)
Updated: 2010-04-23 02:45
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 US President Barack Obama delivers remarks on Wall Street reform at Cooper Union in New York City, April 22, 2010. [Agencies] |
WASHINGTON - US President Barack Obama scolded Wall Street on Thursday for risk-taking that led to the financial crisis and urged the banking industry to stop its "furious efforts" to block tighter regulations.
He warned that the country faced a repeat of the crisis without new rules to rein in the financial industry in a speech that tapped into public fury at big banks and pushed a Democratic regulatory reform bill that is gaining traction in the US Senate.
"A free market was never meant to be a free license to take whatever you can get, however you can get it," Obama said. "One of the most significant contributors to this recession was a financial crisis as dire as any we've known in generations," he added.
"And that crisis was born of a failure of responsibility -- from Wall Street to Washington -- that brought down many of the world's largest financial firms and nearly dragged our economy into a second Great Depression."
He said the legislation would significantly improve the current flawed regulatory structure, "despite the furious efforts of industry lobbyists" to try to weaken the proposals.
Obama, who has in the past referred to Wall Street executives as "fat cats," said some of the huge pay packages in the industry encouraged "perverse incentives to take reckless risks," although he added that he does not begrudge anyone success "when that success is earned."
Obama spoke at the historic Great Hall at Cooper Union college in Manhattan, the venue for several important addresses by leading Americans, including Abraham Lincoln who argued there against the expansion of slavery in a speech that helped assure his 1860 presidential victory.
Cooper Union was also the site of a speech Obama gave on financial reform during the 2008 presidential election campaign. Democrats hope cracking down on Wall Street will help them win voter support at congressional elections in November.
One of Obama's aims in the speech was to put pressure on Republicans to support reform legislation amid signs several in the opposition party may be willing to back the bill.
The legislation got a boost from fraud charges brought against Wall Street powerhouse Goldman Sachs last week and Treasury Secretary Timothy Geithner said he was "absolutely confident" that the reforms will happen.
"If you just listen to the tone of the last couple of days, it's changed. I spent a huge amount of time with Republicans over the last few weeks ... and I think they really want to be for this," he said in an interview on CBS's "The Early Show."
Obama addressed an audience of about 700 people, including financial industry leaders, members of the President's Economic Recovery Advisory Board, local officials and Cooper Union students and faculty.
Goldman Sachs Chief Executive Lloyd Blankfein was expected to attend the speech along with Gary Cohn, the bank's president and chief operating officer, a source familiar with the matter said.
The White House has signaled increasing optimism about garnering Republican support to approve financial regulation legislation in Congress and is targeting moderate Republican senators, including Scott Brown of Massachusetts and Susan Collins and Olympia Snowe of Maine.
Several Republicans have taken aim in particular at the mechanism for winding down failing financial institutions, saying it would lead to perpetual bailouts of Wall Street. The White House says that is not true.
