President Barack Obama will on Thursday venture into the United States financial capital in New York to demand swift action on reforms designed to purge a high-risk and excess-riddled Wall Street culture.
Obama will make a speech at Cooper Union, a college a few kilometres from the epicentre of the US finance industry, stepping up a campaign to enact what he has billed as the most sweeping regulatory reform law since the 1930s.
“Almost two years after the crisis hit and almost one year after the administration first laid out a detailed plan for holding Wall Street accountable and protecting consumers, [Obama] will call for swift Senate action,” White House spokesperson Robert Gibbs said.
“The crisis has already wiped out trillions of dollars in family wealth and cost over eight million jobs.
“The president will also remind Americans what is at stake if we do not move forward with changing the rules of the road as a part of a strong Wall Street reform package.”
The president is seeking to turn up the heat on Republicans ahead of mid-term elections in November, as he pursues tighter restrictions on Wall Street practices and tries to introduce a new consumer financial protection agency.
Republicans face the tricky political task of opposing this next chunk of Obama’s domestic reform drive while avoiding being portrayed by Democrats as in the pocket of Wall Street finance barons blamed for sparking the crisis.
Democrats, who have already passed regulatory legislation through the House of Representatives, need to peel away at least one Republican vote to pass a Bill in the Senate.
In a bid to attract some Republican support, the administration has offered to jettison the idea of a liquidation fund that would be paid for by top banks themselves to actually protect taxpayers.
Republicans have argued that the fund would effectively encourage more taxpayer bailouts — a claim denounced by Democrats as deliberate misinformation.
Special significance
Obama first laid out a version of Wall Street reform at Cooper Union during his presidential election campaign in 2008.
The venue appears to have special significance for the president, as it is where his political idol, Abraham Lincoln, delivered a key speech in the presidential nominating process in 1860.
Last September, Obama travelled to within a few blocks of the US Stock Exchange, to warn Wall Street bosses were ignoring lessons of the financial crisis, and demanded a new age of prudence after years of unchecked excess.
Obama gave a preview of the tone of this week’s remarks on Saturday, in his weekly radio and online address.
“We will hold Wall Street accountable. We will protect and empower consumers in our financial system. That’s what reform is all about,” he said.
“If we don’t change what led to the crisis, we’ll doom ourselves to repeat it. That’s the truth,” the president argued. “Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again.”
Obama pledged on Friday to veto any Wall Street reform Bill that lacks tough new rules to regulate the trade of derivatives, a class of asset implicated in sparking the financial crisis.
His comments came on a day when his cause received a significant boost from news that leading Wall Street bank Goldman Sachs was charged with fraud in the sale of subprime mortgage-based derivatives.
Republicans have warned that if the US government imposes tough new regulations on derivatives, firms that want to trade in the instruments will simply look elsewhere than the US. — AFP