President Barack Obama has urged the battered U.S. financial sector to support what he calls his "common sense" reforms.
Mr. Obama spoke in a major address in New York City, home to many of
the financial firms that faced collapse at the height of the global
financial crisis. The president blamed the collapse on "reckless"
risk-taking and failed regulatory schemes. And he said many companies
are misreading recent signs of economic recovery and ignoring the
lessons of the crisis.
He said critics are wrong when they say that changing the regulatory
system would slow the economy and hurt markets. He said effective,
sensible rules are critical to the proper functioning of markets.
The president said financial firms that were bailed out by taxpayers
have an obligation to help homeowners, small businesses and others now
facing serious problems.
Monday's speech came one year after a major financial firm, Lehman
Brothers, collapsed into bankruptcy, causing a crisis of confidence
that pushed an already troubled economy into recession around the
Mr. Obama is proposing reforms aimed at making investment firms less
likely to take enormous risks. In some cases, those risks brought huge
losses. Worries that the bankruptcy of major firms could wreck
confidence in the financial system prompted Washington to bail out some
Administration officials have said Mr. Obama's policies have helped bring the economy back from the brink of disaster.
Meantime, U.S. unemployment has hit a 26-year high above nine percent,
and experts say it may exceed 10 percent before it eases downward.