As the President was preparing to depart for the G8 Summit in Canada, to be followed by the G20, he received some welcome news regarding efforts to avoid another global economic crisis. The House and Senate, having both passed their own versions of Wall Street Reform, had broken through with an agreement after a long final night of negotiations. The agreement is the final product of over a year of work, and a triumph over armies of lobbyists that most predicted would be able to gut reform the same way they so often have in the past.
The President spoke early this morning, commending the House and Senate for closing in on yet another historic accomplishment:
Now, let me be clear. Our economic growth and prosperity depend on a strong, robust financial sector, and I will continue to do what I can to foster and support a dynamic private sector. But we've all seen what happens when there’s inadequate oversight and insufficient transparency on Wall Street.
The reforms making their way through Congress will hold Wall Street accountable so we can help prevent another financial crisis like the one that we’re still recovering from.
We’ll put in place the toughest consumer financial protections in our history, while creating an independent agency to enforce them. Through this agency, we’ll combine under one roof the consumer protection functions that currently are divided among half a dozen different agencies. Now there will be one agency whose sole job will be to look out for you.
Credit card companies will no longer be able to mislead you with pages and pages of fine print. You will no longer be subject to all kinds of hidden fees and penalties, or the predatory practices of unscrupulous lenders.
Instead, we’ll make sure that credit card companies and mortgage companies play by the rules. You’ll be empowered with easy-to-understand forms so you know what you’re agreeing to. And you’ll have the clear and concise information you need to make financial decisions that are best for you and your family.
Wall Street reform will also strengthen our economy in a number of other ways. We’ll make our financial system more transparent by bringing the kinds of complex deals that help trigger this crisis, like trades in a $600 trillion derivatives market, into the light of day. We’ll enact the Volcker Rule to make sure that banks protected by the safety net of the FDIC can’t engage in risky trades for their own profit. And we’ll create what’s called a resolution authority to help wind down firms whose collapse would threaten our entire financial system. No longer will be have companies that are “too big to fail”.
Over the last 17 months, we passed an economic Recovery Act, health insurance reform, education reform, and we are now on the brink of passing Wall Street reform. And at the G20 summit this weekend, I’ll work with other nations not only to coordinate our financial reform efforts, but to promote global economic growth while ensuring that each nation can pursue a path that is sustainable for its own public finances.