From the Federal Hall on Wall Street, on the one-year anniversary of the economic crisis, President Obama announced financial regulatory reform Monday, September 14 2009.
“Normalcy cannot lead to complacency,” warned the President.
The recovery plan, said the President, has thus far helped the unemployed, given tax breaks for working families, and has increased consumer spending. The government has even eliminated a $250 billion tax money reserve for further spending, and banks have paid back close to $70 billion. This, said Obama, “growing stability means we’re beginning to return to normalcy.”
Obama, calling the reform the “most ambitious overhaul of the financial regulatory system since the Great Depression”, is looking to enact laws that protect consumers, taxpayers, and the economy alike.
The regulatory reform, which Obama intends to have passed by Congress rapidly, sets out to protect consumers and creates a new enforcement agency—the Consumer Financial Protection Agency. New regulations will ensure that financial consumers are given clear and concise information with their credit cards, loans, and other products.
The reform will also work to close loopholes and gaps in the current set of rules, and will clarify overlaps, safeguarding against large and interconnected institutions, like Lehman Brothers or Merrill Lynch, from wreaking havoc on the entire economy. Lastly, in a coordinated effort, Obama is seeking to close the gaps in financial regulations between various countries, putting the same safeguards in place on a global level.
Financial reform will be the central topic of discussion at next week’s G20 Summit in Pittsburgh, PA.
One year ago, super-bank Lehman Brothers closed its door. Merrill Lynch, AIG, Washington Mutual, and Wachovia soon followed suit, in a round of bankruptcies, buyouts, and government bailouts that caused the US economy to halt. In three months, approximately $5 trillion disappeared from the economy and an average of 700,000 jobs a month were lost during the first several months of 2009.
Today, Obama announced, “we can be confident that the storms of the past two years are beginning to break.”