NEW YORK, April 22 (UPI) -- President Barack Obama went to New York Thursday to make his case for U.S. financial system reform, calling it "absolutely necessary" to prevent future crises.
He called on Wall Street executives to work with Washington to pass tough "common sense" reforms that would protect consumers, end the "too big to fail" mentality and bring transparency to the derivatives market.
Obama said the bills being considered in Congress "represent significant improvement on the flawed rules we have in place today, despite the furious efforts of industry lobbyists to shape them to their special interests."
"I am sure that many of those lobbyists work for some of you," he said. "But I am here today because I want to urge you to join us, instead of fighting us in this effort. I am here because I believe that these reforms are, in the end, not only in the best interest of our country, but in the best interest of our financial sector."
Obama expressed support for the Senate version, which would create a process similar to the Federal Deposit Insurance Corp. so that should any of the nation's biggest financial institutions fall into another crisis there will be a system "to shut these firms down with the least amount of collateral damage to innocent people and innocent businesses."
"The goal," he said, "is to make certain that taxpayers are never again on the hook because a firm is deemed 'too big to fail.'"
Obama also said the reform legislation would be "a vote to put a stop to taxpayer-funded bailouts" by creating incentives within the financial industry "to ensure that "no one company can ever threaten to bring down the whole economy."
"To that end, the bill would also enact what's known as the Volcker Rule ... which places some limits on the size of banks and the kinds of risks that banking institutions can take," Obama said.
"This will not only safeguard our system against crises; this will also make our system stronger and more competitive by instilling confidence here at home and across the globe."
Obama added that reform would bring needed transparency to financial markets shrouded in mystery.
Addressing concern in financial circles about the proposed changes, Obama said they will stabilize and strengthen the economy by reining in rampant reckless practices.
"And the only people who ought to fear this kind of oversight and transparency are those whose conduct will fail this scrutiny," he said.
Obama said the reform plan would "enact the strongest consumer financial protections ever," something he called "absolutely necessary."