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Obama delivers a warning to Wall Street
President Obama told executives on Wall Street that they have a moral responsibility to support the regulatory reforms he has proposed in Congress and an obligation to adopt practices that will head off a future financial crash.
“It is neither right nor responsible, after you’ve recovered … to shirk your obligation to a wider recovery,” Mr. Obama said, speaking at historic Federal Hall in Lower Manhattan.
The president traveled to New York’s financial district to deliver the speech on the first anniversary of the collapse of Lehman Brothers, a pivotal moment in last year’s spiraling descent of the nation’s economy. During the darkest three months of the panic, the president said, “$5 trillion of American’s household wealth evaporated.”
The president’s proposal to head off a future collapse has been stalled on Capitol Hill as the Congress has devoted most of its energy to the White House’s plan for an overhaul of the nation’s health care system.
Mr. Obama is pushing a range of new regulatory measures, including granting greater authority to the Federal Reserve to police investment firms, creating a new oversight board to monitor the nation’s largest financial companies and creating a consumer financial protection agency to crack down on abuses by credit card and mortgage lenders.
The president pushed two of his major goals during his speech, to push Congress to act on his regulatory plan and to persuade the public that Wall Street has not returned to business as usual — including eye-popping bonuses and CEO salaries — right after taxpayers were asked to pay for a massive bailout.
A newly released Associated Press poll found that seven out of 10 Americans still believe the federal government has not instituted the safeguards needed to prevent another financial meltdown, and an even higher number — 80 percent — rate the condition of the economy as poor.
Financial institutions, however, bore the brunt of the criticism — 79 percent of those surveyed said banks and lenders that made risky loans deserve much of the blame.
Mr. Obama attempted to channel that outrage during his 30-minute speech, saying that even as the economy begins a “return to normalcy” there are some on Wall Street who are returning to the same risky behavior that brought on the crisis in the first place.
“Unfortunately, there are some in the financial industry who are misreading this moment,” Mr. Obama said. Those involved “do so not just at their own peril, but at the nation’s.”
“We will not go back to the days of reckless behavior,” he said.
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