US President Barack Obama issued a tough message to Wall Street chiefs who gathered in New York’s historic Cooper Union building Thursday, calling on financial leaders to back his financial reforms even as he railed against “battalions of financial industry lobbyists descending on Capitol Hill” to try to influence the outcome of a critical debate.
Obama’s speech came as Democrats and Republicans prepare to face-off over the final shape of new financial regulation legislation.
In December, the US House of Representatives passed a financial reform bill by a 223-202 majority, with no Republicans voting for the bill and 27 Democrats voting against it.
The ball is now in the US Senate’s court, where comprehensive legislation is once again likely to face staunch Republican opposition. Democrats hold a 59-41 vote majority over Republicans in the Senate -- one vote short of the number needed to overcome procedural hurdles to the bill's passage.
Calling for coordinated support for reform, Obama said, "We need to enact a set of updated, common-sense rules to ensure accountability on Wall Street and to protect consumers in our financial system".
Learning from the ‘lessons of this crisis’
Recalling his 2008 visit to Cooper Union during the presidential election campaign, Obama noted that he had warned of the dangers of corporate excesses.
“I take no satisfaction in noting that my comments then have largely been borne out by the events that followed," he said, warning that Wall Street could not go back to business as usual.
“It is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake, that is exactly what will happen if we allow this moment to pass,” he warned.
‘A vote to put a stop to taxpayer-funded bailouts’
Democratic efforts to pass what has been billed as the largest overhaul of the financial industry since the 1930s have been attacked by bankers and Republican lawmakers.
Republican Congressman John Boehner of Ohio, told Investors Business Daily that the proposed legislation was a “job-killing initiative” and that it “would provide the nation's largest financial firms with permanent bailouts.”
Addressing such concerns, Obama noted that "A vote for reform is a vote to put a stop to taxpayer-funded bailouts. The goal is to make certain that taxpayers are never again on the hook because a firm is deemed 'too big to fail.'"
The US president also took on criticism that his reform measures were aimed at stifling free markets. Obama stressed that he was not against the power of the free market. 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,” he added, “a free market was never meant to be a free license to take whatever you can get, however you can get it.”