Obama Administration threatens to veto Wall Street reform bill

The Obama Administration has threatened to veto any Wall Street reform bill that does not bring the derivatives market under control.

"I want to see what emerges, but I will veto legislation that does not bring the derivatives market under control and some sort of regulatory framework that assures that we don't have the same kind of crises that we've seen in the past," Obama said in his remarks with the President's Economic Recovery Advisory Board. Obama said there is need for a strong and healthy financial sector to grow jobs and economy."It's exactly because of the centrality and importance of the financial sector that we have to act.

The devastating recession that we just went through offered a very painful lesson in what happens when we don't have adequate accountability and transparency and consumer protection" he said. Asserting that history can't be allowed to repeat itself, he said never again should American taxpayers be forced to step in and pay the price for the responsibility of speculators on Wall Street who made risky bets with the expectation that taxpayers would be there to break their fall.

"We can't leave in place a tattered set of rules that will allow another crisis to develop without the tools to deal with it. That's why I expect that we are going to have a strong reform proposal that demands new accountability from Wall Street and provides new protections for consumers," he said.
     
"This is reform that will force banks and financial institutions to pay for bad decisions that they make, and not have taxpayers pay for those bad decisions. And that means no more bailouts," Obama said adding that this reform would also bring new transparency and accountability to the derivatives market.
     
"The derivatives market is where a lot of the big, risky financial bets by companies like AIG took place. There are literally trillions of dollars sloshing around this market that basically changes hands under the cover of darkness. When things go wrong, as they did in AIG, they can bring down the entire economy, and that's why we've got to bring more transparency and oversight when it comes to derivatives and bring them into a framework in which everybody knows exactly what's going on, because we can't afford another AIG," he argued.
     
Obama said some people in the industry are not happy with the prospect of these reforms.