Obama proposes tighter financial regulation by Magdalena Rosova

American President Barack Obama lectured Wall Street saying that financial leaders should not use the recovering economy to return to careless behavior that could possibly cause next meltdown. Obama said on Monday that the economy urgently needs tighter financial regulation and he warned financial leaders not to block it. It is a year since the Lehman Brothers investment bank collapsed. Its collapse was the biggest bankruptcy in U.S. history and forever it will be reminder of the financial crisis which brought country into a deep recession. Obama thinks that the leaders should be thankful that their government helped them to recover. Therefore Obama said they are supp! osed to help in achieving the goal of wider recovery and creating a more stable system based on more broadly shared prosperity. The truth is that although investment giants return to profit, millions of taxpayers still faces unemployment or home foreclosures. Obama warned those in financial industry who misunderstood that moment saying America would not return to the days of reckless behavior. The public is still angry and negative about Wall Street and the economy. According to a Associated Press-GfK poll, seven out of ten Americans do not believe that the government has taken safeguards to prevent another financial crisis. Obama's plan of regulatory change is now up to Congress. Some republicans protest that the regulatory schemes would fundamentally undermine risk taking. In reaction Obama asked whether the absence of regulation one year ago had been better for financial system. In his plan Obama propose tougher capital requirements for banks saying that bank's b! uying without keeping enough cash in reserve was the main caus! e of the crisis. Obama is also planning to give the Federal Reserve more powers to make sure that no company will become too big. He also proposes to create rules for financial products, so people know exactly what they are buying.

related story (sgx15370): http://content.usatoday.com/communities/theoval/post/2009/09...

by Magdalena Rosova for PocketNews (http://pocketnews.tv)

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