Tags: US | Obama

Obama Demands More Power Over Risky Investments

Wednesday, 14 Apr 2010 10:58 AM

President Barack Obama said Wednesday that he wants greater federal oversight of derivatives — investment products that contributed to the nation's financial meltdown.

The president met with House and Senate leaders of both parties to discuss legislation revamping regulation of the financial industry. The Senate is beginning to debate the measure amid sharp partisan differences.

Senate Republican Leader Mitch McConnell of Kentucky, who sat two chairs from Obama in the White House Cabinet Room, delivered a speech earlier Wednesday saying the administration-backed bill would perpetuate bailouts for Wall Street rather than end them.

Obama, speaking briefly to reporters before the closed meeting began, said he was "absolutely confident that the bill that emerges is going to be a bill that prevents bailouts. That's the goal."

"If there's one lesson that we've learned," he said, "it's that an unfettered market where people are taking huge risks and expecting taxpayers to bail them out when things go sour is simply not acceptable."

He called for "a strong mechanism to regulate derivatives." Obama also said the complex investment packages exist "in the shadow economy" and are "enormously risky."

"We want to get that into daylight," he said.

Derivatives are contracts used to hedge risk or speculate on the future value of assets. The most problematic derivatives from 2008 and 2009 involved mortgage loans that went into default.

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President Barack Obama said Wednesday that he wants greater federal oversight of derivatives investment products that contributed to the nation's financial meltdown. The president met with House and Senate leaders of both parties to discuss legislation revamping...
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Wednesday, 14 Apr 2010 10:58 AM
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