President Barack Obama on Thursday delivered more of an appeal than a demand to Wall Street executives to get behind financial regulatory reform, reminding them that they made out “like bandits” while the rest of the economy has suffered.
Speaking to a crowd of hundreds that included top Wall Street executives, Obama said financial reform is “absolutely essential” to prevent another economic crisis “born of a failure of responsibility, from Wall Street to Washington.” He cited 8 million jobs lost and “countless small businesses” that have gone under as proof that action is needed to prevent another financial sector meltdown.
“A free market was never meant to be a free license to take whatever you can get, however you can get it. That is what happened too often in the years leading up to the crisis,” the president said. “That is why I feel so strongly that we need to enact a set of updated, commonsense rules to ensure accountability on Wall Street and to protect consumers in our financial system.”
Obama drew applause when noting that financial reform legislation is picking up bipartisan support in the Senate, despite the “battalions of financial industry lobbyists” trying to block the measure. The bill put forward by Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) would beef up consumer protections and inject transparency into complex financial dealings.
The president also sought to debunk GOP claims that Dodd’s legislation is akin to another taxpayer bailout. The accusation stems from a provision in Dodd’s bill that provides for a $50 billion bank fund, collected in advance from large financial firms, that will be used for the resolution process.
To make that suggestion “may make for a good sound bite, but it’s not factually accurate. In fact, the system as it stands is what led to a series of massive, costly taxpayer bailouts. … A vote for reform is a vote to put a stop to taxpayer-funded bailouts. That’s the truth,” Obama said.
The president delivered his remarks at Cooper Union, just blocks from Wall Street. Among those in the audience were Barry Zubrow of JPMorgan Chase, Tom Nides of Morgan Stanley, Gary Cohn of Goldman Sachs and Bruce Thompson of Bank of America. New York Gov. David Paterson, New York Attorney General Andrew Cuomo and New York City Mayor Michael Bloomberg were also in attendance.