President Obama: "We cannot wait any longer for real financial reform"
Today, Senate Banking Chairman Chris Dodd introduced a bill to reform the financial sector that failed millions of American workers, households, and small businesses. The proposal would create a new unit of the Federal Reserve with the power to enforce consumer protection rules over mortgage-related businesses and non-bank financial firms like insurers. It would allow the Fed to order the break-up of large financial firms deemed to pose a threat to the financial system’s stability, and would make sure that banks return to their core mission of serving their customers instead of operating hedge funds and private equity funds with taxpayers’ assistance.
President Obama welcomed the legislation:
"We cannot wait any longer for real financial reform that brings accountability to the financial system and makes sure that the American taxpayer is never again asked to bail out the irresponsibility of our largest banks and financial institutions.
This proposal provides a strong foundation to build a safer financial system. It creates a new consumer financial protection agency to set and enforce clear rules of the road and establishes stronger supervision for the largest financial firms under the Federal Reserve. It brings transparency and oversight to derivatives and other financial markets that were central to the crisis and separates banking from proprietary trading and hedge funds. The proposal will also provide the government with essential tools to respond in a financial crisis, so that we can wind down and liquidate a large, interconnected failing financial firm. It allows us to protect the economy and taxpayers so that we can end the belief that any firm is "Too Big to Fail".
…We need to ensure the ultimate bill provides strong, clear authority for setting and enforcing rules, limiting excessive risk taking in the financial system, and winding down the largest financial firms when necessary in a way that does not cause a financial panic. All derivatives must be regulated and shareholders should have a say not just on pay but also other compensation that rewards risk taking. We will stand firm against any attempt by the financial sector to avoid their responsibilities: in any future crisis the big financial companies must pay, not taxpayers."
