Obama defends handling of Wall Street, financial crisis during meet with fiscal regulators

“We did not just rebuild this, we rebuilt it better, and we’ve rebuilt it stronger," Obama said of the economy during Monday's meeting.
By Doug G. Ware  |  March 7, 2016 at 5:05 PM
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WASHINGTON, March 7 (UPI) -- President Barack Obama on Monday met with regulators, including the heads of the Treasury Department and Federal Reserve, to discuss improving oversight of U.S. banking regulations -- and evaluate actions his administration has taken in recent years to recover from the devastating financial crisis.

Obama met with the 10-member Financial Stability Oversight Council, which includes Treasury Secretary Jacob Lew and Fed chairwoman Janet Yellen -- as well as Securities and Exchange Commission chairwoman Mary Jo White and Comptroller of the Currency Thomas J. Curry.

The purpose of the meeting was to check how the government was implementing the Dodd-Frank financial reform law and Consumer Protection Act, which were each passed in 2010 following the financial crisis.

Obama defended his handling of the financial crisis of 2007-09, which ended basically at the same time he took office. Critics have said in recent years that the president's administration didn't sufficiently address the crisis and its effects.

"It is popular in the media, and political discourse both on the left and on the right to suggest that the crisis happened and nothing changed. That is not true," Obama said.

"I want to dispel the notion that exists both on the left and on the right that somehow, after the crisis, nothing happened," he continued. "We did not just rebuild this, we rebuilt it better, and we've rebuilt it stronger."

One part of the Dodd-Frank law that remains unfinished is a portion regarding the governance of executives' pay on Wall Street. The SEC will introduce a rule later this year to govern incentive-based executive pay -- a stipulation intended to make it less likely execs will take "reckless risks" that could threaten the entire financial system.

Republicans, and even some Democrats, have been critical of the Obama administration's treatment of Wall Street during his presidency. One particular criticism has been that those efforts have harmed small businesses.

"Instead of huddling at the White House, Washington regulators should be meeting with small-business owners and consumers on Main Street," House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said, calling Obama's handling of Wall Street, "hyper regulated."

Obama, though, said the responsibility to oversee the workings and potential risks of Wall Street is not exclusively his.

"If there is a significant challenge in terms of regulating Wall Street and regulating our financial sector, it is primarily coming from certain members of Congress who are consistently pressuring independent regulators to back off," he said.

During the annual meeting, Obama also pledged to make certain aspects, including shadow banking and cybersecurity, higher priorities during the final 10 months of his presidency.

"One of the things we discussed was the fact that there is a shadow-banking industry -- a set of institutions that under current law are not always labeled in the same way that banks are labeled," Obama said, adding that his administration wants to better address some parts of the financial services sector that have traditionally fallen outside of the government's regulatory scope.

On cybersecurity, Obama pledged to make consumer protection in that area a top priority in the final months of his second term -- noting that government regulation must keep up with continuing innovations in information technology.

The White House approach to Wall Street and its economic impact is expected to be a significant issue in the 2016 presidential election.

Democrat Bernie Sanders has said Obama's efforts haven't gone far enough to rein in Wall Street, while Hillary Clinton is viewed by some as having a softer stance on the matter.

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