Obama Warns Wall St: Don't Forget How Close We Were To The "Abyss"

By Robert Schmidt
June 16 (Bloomberg) -- President Barack Obama, warning Wall Street not to forget how it almost caused the financial system to collapse, said “sensible” new rules are needed to tighten oversight and restore confidence in U.S. markets.
“Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected,” Obama said in an interview with Bloomberg Television today at the White House. “All we’re doing is cleaning up after the mess that was made.”
The president will tomorrow unveil his proposal for revamping financial regulation, an effort likely to result in the most sweeping overhaul since the 1930s. Many of the changes will need to be approved by Congress, where jurisdictional and ideological clashes may delay and alter the shape of final legislation. Obama wants to sign the law by year-end, fulfilling a top domestic priority.
Crafted by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers, Obama’s plan would put the Federal Reserve in charge of regulating companies whose collapse could damage the entire financial system. It would also create a new agency for overseeing consumer financial products, such as mortgages and credit cards.
The proposal encompasses areas ranging from derivatives to executive pay to the mortgage-backed securities that helped fuel the housing boom and then touch off the credit crisis.
‘Rules of the Road’
“We now need some sensible rules of the road so that people aren’t taking exorbitant risks,” Obama said. LinkHere