Political India: Engaging America

From The Hindu

President Barack Obama finally made sweeping reform of Wall Street institutions a reality on Wednesday, by signing into law the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In a celebrity-laden ceremony Mr. Obama said “Ultimately, there is no dividing line between Main Street and Wall Street... So these reforms will help lift our economy and lead all of us to a stronger, more prosperous future, and I am honoured to sign them into law.”

As chairmen of the committees shaping and driving the Bill forward through Congress Representative Barney Frank and Senator Chris Dodd received praise from President Obama for working “day and night to bring about reform.”

Others present included Senate Majority Leader Harry Reid, Speaker of the House Nancy Pelosi, Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and numerous dignitaries from the government and from industry and consumer protection groups.

Explaining why America needed this reform package desperately Mr. Obama said it would help crack down on abusive practices in the mortgage industry, provide students taking out college loans with clear and concise information about their obligations and supply more information to ordinary investors about the costs and risks of mutual funds and other investment products.

Mr. Obama said, “All told, these reforms represent the strongest consumer financial protections in history. And these protections will be enforced by a new consumer watchdog with just one job: looking out for people — not big banks, not lenders, not investment houses — in the financial system.”

However seeking to dispel any notion that the financial services industry would be impeded by the reform he said, “The financial industry is central to our nation’s ability to grow, prosper, compete, and innovate... This reform will help foster innovation, not hamper it.” Yet he emphasised that the overhauls proposed in the Dodd-Frank Act were designed to ensure that everyone followed the same set of rules and firms could compete on price and quality, not “tricks and traps.”

The President also highlighted the structural reforms that would be game-changing and create greater accountability on Wall Street: “Reform will also rein in the abuse and excess that nearly brought down our financial system. It will finally bring transparency to the kinds of complex, risky transactions that helped trigger the financial crisis. And shareholders will also have a greater say on the pay of CEOs and other executives, so that they can reward success instead of failure.”

Most importantly, he added, the new laws would ensure that the American people “will never again be asked to foot the bill for Wall Street’s mistakes... There will be no more taxpayer-funded bailouts. Period.”

In closing Mr. Obama stressed that there was still much work to be done, because for these new rules to be effective, regulators would have to be vigilant and adjustments may be required the U.S. financial system adapted to these changes.

Labels: Barack Obama, financial overhaul, recession, Wall Street reforms