June 16th, 2009
02:27 PM ET
6 years ago

Financial reform won't add lots of new agencies, Obama says

WASHINGTON (CNN) – President Barack Obama will propose new regulatory controls for financial markets Wednesday, but says he isn't seeking to add a "whole host" of new agencies.

In remarks at a joint news conference Tuesday with South Korean President Lee Myung-bak, Obama said his goal is to update a regulatory system that has been relatively unchanged since the 1930s.

"I expect that Congress will work swiftly to get these laws in place," Obama said. "I want to sign them and get them up and running."

Regulatory gaps and a lack of oversight led to "wild risk-taking" that precipitated the U.S. economic crisis, imperiling financial institutions and the United States and global economies, Obama said.

"We have to make sure we have an updated regulatory system," he said, but added he would not be seeking "a whole host of regulatory agencies."

A new system would be streamlined with overlapping coverage "so that you don't see people falling through the gaps," the president said.

He warned against unspecified special interest groups that would oppose his changes because they want to "keep on taking these risks and expect the government to bail them out."

In a commentary published in Monday's Washington Post, Treasury Secretary Tim Geithner and the director of the National Economic Council, Lawrence Summers, said Obama's proposal would grant the Federal Reserve increased power in the oversight and management of the largest financial companies in the market.

In addition, the proposal intends to impose stricter reporting standards for asset-backed securities in an attempt to prevent a housing boom and subsequent bust like the one that catalyzed the current downturn, the two men wrote.

The housing collapse, fueled by the popularization of subprime mortgages, was evidence of weak consumer protection, Geithner and Summers wrote, adding that the proposal Obama will unveil Wednesday works to continue to protect consumers.

Another component of the plan, which "will be available only in extraordinary circumstances," according to Geithner and Summers, creates an option to dissolve financial companies that are too big to fail.

"It will help ensure that the government is no longer forced to choose between bailouts and financial collapse," they wrote.


Filed under: President Obama
soundoff (45 Responses)
  1. 25 year old independent

    Whats funny is that you people on these blogs actually think anybody is going to care what you have to say. If you actually want to do something besides complain complain complain which you all apparently do very well to take your frustration out on your unhappy lives. TALK TO YOUR REPRESENTATIVE AND DO SOMETHING WITH YOUR LIVES BESIDES COMPLAIN AND POST THINGS ON BLOGS THAT NO ONE IS GOING TO READ!!!!!!!!!!!!! the funny thing is that as i'm writting this I'm realizing that I just wasted my time writing this cause again NOBODIES GOING TO CARE AND EVERYBODYS GOING TO CONTINUE DOING WHAT THEY DO NO MATTER WHOS IN POWER!!!!!!

    June 16, 2009 03:31 pm at 3:31 pm |
  2. katiec

    It is about time. We need to get these regulations in place so the financial institutions can never again do what they have to our
    country.
    Of course, the non regulations republicans will fight it, as, they
    are totally in bed with big business. But, how can they ever claim
    that their decisions to de-regulate was a good idea? Whoops,
    forgot, this is the republicans we are talking about and they
    do not know the meaning of truth or responsibility to us and
    our country.

    June 16, 2009 03:35 pm at 3:35 pm |
  3. Dan

    Who has taken accountability for the Iraq war? More Americans died in Iraq than on 9/11, not to mention all the wounded who came home to third world medical care. Of course Jesus told Bush it was best to invade Iraq. Don't we usually lock up people who claim God tells them to kill others? Do you really think Jesus would bomb Iraq?

    June 16, 2009 03:35 pm at 3:35 pm |
  4. Fed Up

    Typical Republican – Hasn't your brain finished developing yet? To compare police and fire protection, to credit card protection is just plain stupid. Come back when you have something serious to contribute. This country doesn't need more programs to protect people from the idiotic decisions they make. Go rent the movie Idiocracy, it's up to your speed.

    June 16, 2009 03:36 pm at 3:36 pm |
  5. demwit

    Believe what I say., not what I do.

    June 16, 2009 03:36 pm at 3:36 pm |
  6. Maybe once too often..

    Obama remember the story of the sheppard boy who yelled wolf once too often.....well, you are about there...and you are losing our trust

    If, you really have what it takes to be the President and get on with it and show us results...tired of you rhetoric and your silver tongue. !!

    June 16, 2009 03:36 pm at 3:36 pm |
  7. LacrosseMom

    A mere FIVE MONTHS in Office, and the GOPers think President Obama should have solved & fixed the DISASTER it took Bush EIGHT YEARS to create!

    Hypocrites? You bet ya!

    June 16, 2009 03:38 pm at 3:38 pm |
  8. demwit

    Hey! Maybe ABC will do a free primetime special on this too!!

    June 16, 2009 03:40 pm at 3:40 pm |
  9. John M in NoHo CA

    When did this turn in to a Fox News blog?

    June 16, 2009 03:43 pm at 3:43 pm |
  10. Sniffit

    @ Sam Sixpack, who asked "Why do so many people continue to pretend no one could see this coming?"

    Because it wasn't really the housing bubble that caused it. It was mainly the complicated credit-default swaps with securities that had been created by bundling the subprime mortgages...securities that had been rated as far less risky than they really were because the financial institutions that created them are the ones who pay the institutions that rate them in the first place. Because of the improper ratings practices, the entire financial industry operated these irresponsible deals under a cloak of propriety that really just amounted to smoke and mirrors. It was these securities, in fact, that encouraged mortgage lenders and brokers to push subprime mortgages in a borderline fraudulent manner by failing to divulge the true risks involved to the people who took them thinking it was the only opportunity they'd get to buy a home and live the American dream. This isn't about gravity...there's no such thing as economic gravity...the absolute failure of trickle-down economics proved that.

    June 16, 2009 03:44 pm at 3:44 pm |
  11. Mississippi Mike

    Guess what, new regulations and massive infusions of tax dollars create new bureaucracies. It's a fact of life. If Obama is trying to say that it won't, this is all the proof you need that he is a nothing but a liar.

    June 16, 2009 03:46 pm at 3:46 pm |
  12. Carl

    It always cracks me up when you keep hearing how small government caused the Depression and FDR's policies saved the US (I'll agree to that part about WW2, not the Depression).

    Listen to Congressman Ron Paul talk about the subject, and then listen to a Keynesian talk about it. If you are still agreeing with the Keynesian after 30 minutes of research, then there is no helping you.

    If you don't know what a Keynesian is and want to respond negatively to me, then you're wasting your time. Your words would not be worth reading for they don't contribute to the conversation.

    June 16, 2009 03:49 pm at 3:49 pm |
  13. Melissa

    Fed Up, the rest of us are sick of people like you that don't give a crap about anyone but yourself. Go crawl back under your rock, snake.

    June 16, 2009 03:51 pm at 3:51 pm |
  14. Sniffit

    @ Fed Up, who asked "You need a kleenex? Don't you have a job? You obviously have no clue about your ramblings. You appear to need the government to take care of you. Can't take care of yourself?"

    Have job...take care of me and mine just fine "my friend." But no clue about my ramblings? Why don't you wait and see if your boy Boehner and his pet monkey Cantor prove me right? Or will it be Graham or one of the others this time throwing draft bills on the House floor like petulant children?

    If you don't understand how significant the changes in the financial systems and institutions that underpin the nation's economy have changed since 1930, I would suggest you buy a book and read up. The appalling part of this is NOT that Obama is suggesting reform: it's that for the past 3 decades since Reagan and the GOP convinced the country to believe in some pretty insipid economic theories, everyone bought into the idea that reform wasn't needed, that industries regulate themselves and that the economy can fix itself...and then failed to do anything about the fact that we were headed towards a cliff, despite the mounting evidence present in the most rudimentary of statistics.

    June 16, 2009 03:53 pm at 3:53 pm |
  15. Typical Republican

    Fed Up June 16th, 2009 3:36 pm ET

    Typical Republican – Hasn't your brain finished developing yet? To compare police and fire protection, to credit card protection is just plain stupid. Come back when you have something serious to contribute. This country doesn't need more programs to protect people from the idiotic decisions they make. Go rent the movie Idiocracy, it's up to your speed.
    -------------------
    That's what I'm saying man, I just changed my mind because of what you said.

    Now I think we should spend lots of money on the military to protect us, but nothing on anything else to protect us. Let's get selective on what we can't do for ourselves and label it 'Proud American" and pretend it's being intelligent. But to anything else that protects us, let's call it 'mommy and daddy' institutes. The republican way!

    June 16, 2009 03:54 pm at 3:54 pm |
  16. me happy

    to sniffit: Need somewhere to belong, honey? Wanna hug?

    to Typical Republican: Dude, all of your post are soooo original! Wow, if only other people could be as creative as you are. Wow, what a world that would be! Just imagine, everyone saying one thing but meaning another; are you the one who thought of this concept called sarcasm? you know you should put a patent on it- because my 12 year old is using it too; that is whenever he is unable to explain his opinion in an adult fashion.

    June 16, 2009 03:56 pm at 3:56 pm |
  17. Sniffit

    @ 25 year old independent, who said "the funny thing is that as i'm writting this I'm realizing that I just wasted my time writing this cause again NOBODIES GOING TO CARE AND EVERYBODYS GOING TO CONTINUE DOING WHAT THEY DO NO MATTER WHOS IN POWER!!!!!!"

    Deep breath...grain of salt dude. It's a fun diversion from work is all.

    June 16, 2009 03:57 pm at 3:57 pm |
  18. Tim

    Sorry, when Obama speaks as if he knows with certainty as to what he talks about, I can't take him seriously. I still have a picture in my mind of him organizing a bake sale at the reverend Wright's church. How he became president is freakish.

    June 16, 2009 03:59 pm at 3:59 pm |
  19. Martin

    Of course they won't add a lot of government employees just like the szars he has appointed. I would like to see the increase in the White House budget under Obama. Rediculous.

    June 16, 2009 04:00 pm at 4:00 pm |
  20. Trade Freedom for Security, Lose Both

    Ever see the commercials for Hulu? That's what Government is doing to your brain.

    June 16, 2009 04:00 pm at 4:00 pm |
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