Inspirited Obama sets sights on banking reform

08:34, March 25, 2010      

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Fresh from a landmark healthcare victory, President Barack Obama is setting his sights on sweeping reforms of Wall Street's "too-big-to-fail" banks.

Obama – who Tuesday signed healthcare legislation that will overhaul one sixth of the economy – was joined by key lieutenants in pressing for a similar remake of the banks, blamed for dragging the economy to the brink.

In the Senate, Obama ally Christopher Dodd pushed a 1,000-plus-page finance reform package through his powerful banking committee, while Treasury Secretary Timothy Geithner appeared at a conservative think tank to call for reform.

Dodd's key committee Monday passed the bill without Republican support in a 13 to 10 vote, paving the way for a full Senate vote and leaving Dodd – who will retire by the end of 2010 – to promise reform by year's end.

The bill would introduce a slew of Wall Street reforms, creating a potentially powerful consumer financial protection agency, placing checks on executive bonuses and curbing risky investments.

The White House quickly moved to welcome passage of the bill, which Obama said would help ensure "the American taxpayer never again pays the price for the irresponsibility of our largest banks and financial institutions."

Obama vowed to continue to fight to strengthen the measures as they move to the full Senate in the coming weeks.

Geithner, whose legacy as treasury secretary will likely depend on the recovery from the banking-induced crisis, told the American Enterprise Institute "financial reform is not a war of choice, it is a war of necessity."

He also vowed to fight opponents of reform, who he alleged were spending over $1 million a day to neutralize the package, which would also create a committee with the power to break up "too-big-to-fail" banks.

Geithner warned lawmakers the passage of the bill would be a "test of our capacity as a nation to deal with complex and consequential problems."

"If we fail to act, America will lose this opportunity to set the global agenda," he cautioned.

The American Bankers Association also denied Monday opposing reform but said the current bill would "reduce the ability of our industry to support the economy."

Still, with widespread popular support for reform, the Obama White House may also see an easy next legislative target, particularly with Congress plagued by partisanship after the healthcare vote.

With Democrats likely to paint Republican healthcare opposition as pro-industry, Republicans may be reluctant to cast their lot with despised bankers ahead of this year's midterm elections, according to Douglas Elliot of The Brookings Institution.

Source: Global Times
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