President Barack Obama is calling for legislation to more tightly regulate the U.S. financial industry. The president said Wednesday that he wants to prevent more situations like that at the giant insurance company, American International Group, or AIG, where top executives were paid huge bonuses while taxpayers' money keeps the company afloat.
President Obama called the AIG bonuses "outrageous," and said they are a symptom of an "outrageous" corporate culture.
"A situation where excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us 'holding the bag' [left to suffer the consequences]," he said.
As he prepared to board a helicopter to start his trip to California, Mr. Obama acknowledged the public anger at corporate executives who accept large salaries and bonuses despite their companies' financial troubles.
"I do not want to quell anger," he said. "I think people are right to be angry. I am angry. What I want us to do, though, is channel our anger in a constructive way."
The president said he and his economic advisers are talking with top lawmakers about creating a new regulatory agency that would give the government more oversight over companies like AIG.
"And it is appropriate for us to have some regulatory mechanisms in place to ensure that we never have a situation where the government has to step in or you have got taxpayers who are having to foot the bill for other people's mistakes," said Mr. Obama.
Mr. Obama called for legislation from Capitol Hill that would set up an authority that would protect creditors, depositors and consumers.
While the president says no one in his administration approved the AIG bonuses, he said it is his responsibility to see that the problem is fixed.
"The buck stops with me," he said. "My goal is to make sure that we never put ourselves in this kind of position again."
The president also defended his Treasury Secretary, Timothy Geithner, who is being sharply criticized in Congress and elsewhere for his handling of the situation at AIG.
"There has never been a Secretary of the Treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who has had to deal with the multiplicity of issues that Secretary Geithner is having to deal with, all at the same time. He is doing so with intelligence and diligence," he said. "Nobody is working harder than this guy."
As Mr. Obama spoke outside the White House, AIG's Chairman and Chief Executive Officer, Edward Liddy, was testifying before a House of Representatives financial services subcommittee.
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