President Obama welcomes U.S. financial reform as blueprint for global reform

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, June 25 – Hours before leaving Friday to attend the G8 and G20 meetings in Canada on global financial issues, President Obama got what he'd wanted to take with him: a House/Senate agreement on financial reform legislation.

Obama said that in this weekend's Toronto summit, he hopes to hammer out new international agreements “to promote economic growth, to pursue financial reform, and to strengthen the global economy.”

Calling for new coordinated international “safeguards” to deal with threats to the world's closely linked economies, he welcomed Friday morning's House/Senate agreement. He said “I’m gratified we’ve made great progress toward enacting such safeguards at home. Because of the hard work of Chairman Dodd and Chairman Frank, the strong leadership of Chairwoman Lincoln and Chairman Peterson, and the great efforts of the conferees and members of both parties, we are poised to pass the toughest financial reforms since the ones we created in the aftermath of the Great Depression. Early this morning, the House and Senate reached agreement on a set of Wall Street reforms that represent 90% of what I proposed when I took up this fight.”

Reacting to Republican charges that the reforms will undermine the U.S. financial sector, Obama said that “Our economic growth and prosperity depends on a strong, robust financial sector and I will continue to do what I can to foster and support a dynamic private sector. But we’ve all seen what happens when there is inadequate oversight and insufficient transparency on Wall Street.”

Obama said that “The reforms making their way through Congress will hold Wall Street accountable so we can help prevent another financial crisis like the one from which we are still recovering. We’ll put in place the toughest consumer financial protections in our history, while creating an independent agency to enforce them. Through this agency, we’ll combine under one roof the consumer protection functions that currently are divided among half a dozen different agencies.”

In addition to new measures to oversee credit card companies, mortgage lenders and other financial institutions to curb “predatory practices,” the President said that “We’ll make our financial system more transparent by bringing the kinds of complex trades that helped trigger this crisis – like trades in a $600 trillion derivatives market – into the light of day. We’ll enact the Volcker Rule to make sure banks protected by a safety net like the FDIC can’t engage in risky trades for their own profit. And we’ll create what’s called a resolution authority to help wind down firms whose collapse would threaten our entire financial system. No longer will we have companies that are 'too big to fail'.”

Relating U.S. financial reform to global issues, Obama concluded that “Over the past 17 months, we’ve passed an economic Recovery Act, health insurance reform, education reform, and we are now on the verge of passing Wall Street reform. And at the G20 summit this weekend, I’ll work with other nations not only to coordinate our financial reform efforts, but to promote global economic growth, while ensuring that each nation can pursue a path that is sustainable for its own public finances. As the main forum for international economic cooperation, the G20 is the right place to discuss such issues. And over the next few days, I hope we can build on our past progress and strengthen the global economy for a long time to come.”

House Speaker Nancy Pelosi (D-CA) joined Obama in praising the financial reform agreement. She commented that “Congress has responded to the worst financial crisis in 70 years by moving one step closer to sending to the President for his signature the toughest regulation of Wall Street in generations – restoring common sense after a decade of recklessness.” Reflecting the sharp partisan differences aired in the financial reform debate, Pelosi said that “Despite overwhelming opposition from Congressional Republicans and relentless lobbying by special interests, Congress will enact historic legislation that brings transparency to our financial markets, tough oversight to Wall Street, and consumer protections to Main Street. The legislation will end the era of taxpayer-funded bailouts and too-big-to-fail financial firms, and it will be fully paid for, with Wall Street footing the bill. This law will send a clear warning: no longer will we allow recklessness on Wall Street to cause joblessness on Main Street.”

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