Comparing the U.S. economy to a house on shifting sands, President Barack Obama has appealed to the U.S. financial industry to support reforms he describes as vital to avoiding another economic collapse. The president spoke in New York.
Aiming his appeal directly at the financial industry and skeptics within it, and at Republican critics in Congress, the president warned of the danger of a repeat of economic collapse.
Calling the financial crisis the outcome of a failure of responsibility from Wall Street to Washington, he said the time has come to seize the moment to make fundamental changes in the rules of the financial road.
"It is essential that we learn the lessons of this crisis, so we do not doom ourselves to repeat it," said the president. "And make no mistake, that is exactly what will happen if we allow this moment to pass. That is an outcome that is unacceptable to me and it is unacceptable to you, the American people."
With many, but not all, of the most prominent executives of Wall Street firms present, the president outlined key aspects of legislation the Senate will debate in coming days.
These include steps to impose new oversight and controls on hedge funds and complex financial instruments known as derivatives, and protections for consumers of financial products.
Of particular importance would be a system to ensure that troubled financial companies could be dismantled in an orderly way without posing the kind of systemic risk they did in 2008.
Calling the Senate bill and one the House of Representatives approved last year a significant improvement over flawed rules now in place, he said changes would be advantageous for the industry and the country.
The president took aim at the tens of millions of dollars and hundreds of financial industry lobbyists who have descended on Capitol Hill in recent weeks attempting to urge lawmakers to oppose the legislation.
"I am sure that some of these lobbyists work for you and they are doing what they are being paid to do. But I am here today, specifically when I speak to the titans of industry here, because I want to urge you to join us, instead of fighting us in this effort," he said.
President Obama also directed attention to an ongoing and enormously sensitive issue for Americans - multi-million dollar salaries, bonuses and other compensation paid to industry executives.
"Some of the salaries and bonuses we have seen created perverse incentives to take reckless risks that contributed to the crisis. It is what helped lead to a relentless focus on a company's next quarter, to the detriment of its next year or decade," he said.
Critics say the Senate measure would amount to an authorization for continuing government bailouts of the financial industry.
On Capitol Hill, minority Republicans have softened opposition to Senate legislation, but negotiations continue on provisions. Democrats hope for a vote by next week.
