Obama urges speed on banking reforms
President Barack Obama urged the US's top financial regulators to move faster on new rules for Wall Street, telling them in a private White House meeting that they must work to prevent a repeat of the 2008 recession.
Aides said Mr Obama also told the regulators that the US needed a more simplified and certain system of financing housing. The President recently endorsed proposals to reduce the government's role in providing mortgages.
Administration officials and some lawmakers have expressed frustration that critical parts of Mr Obama's overhaul of the financial system, which was voted into law three years ago and is known as the Dodd-Frank Act, remain unenforced as federal agencies wrangle over how to adopt it.
They highlight the failure in putting the Volcker Rule into effect. It would prohibit banks from risking institutional money in speculative investments. Last month Jacob Lew, the Treasury Secretary, complained in a speech that the regulators were moving too slowly to confront the dangers of banks so large that governments cannot allow them to fail for fear of bringing down the economy. "If we get to the end of this year, and cannot, with an honest straight face, say that we've ended 'too big to fail', we're going to have to look at other options," Mr Lew said.
The meeting was an attempt to raise those concerns directly with the agencies responsible for turning the law into reality. Among those in attendance were Mr Lew, Federal Reserve chairman Ben Bernanke, and executives from the Federal Housing Finance Agency, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Congress passed Dodd-Frank in 2010. Since then regulators have been working to turn the mammoth law into workable regulations, often in the face of opposition from lobbyists for banks.
Among the rules that have yet to be put into effect are enhanced prudential standards for banks and other institutions; capital and margin rules for derivatives; new mortgage disclosure regulations; and the Volcker Rule. Treasury officials said they expected regulators to finish work in those areas by the end of the year. As the banks have returned to profitability, the Obama administration has sounded increasingly impatient about the pace of bank regulation.
Its desire to speed things up comes at what appears to be an opportune time. The fear that banks are too big, and could jeopardise the wider economy if they fail, is shared by people on both the left and right of politics. Congress has introduced two bills in recent months that envision far more drastic overhauls than Dodd-Frank, both with bipartisan support.