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Officials: Obama won't be 'trashing' Wall Street in speech
By: cnn.comPosted On: 04/22/2010 12:20 P
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President Obama won't slam Wall Street in his speech Thursday in New York, in part because the White House believes it's winning the reform fight and doesn't need to stir the pot, senior administration officials said.
President Obama won't slam Wall Street in his speech Thursday in New York, in part because the White House believes it's winning the reform fight and doesn't need to stir the pot, senior administration officials said.
Bankers have been told that Obama won't be "trashing" them at all, according to top officials who have seen the final draft of the president's speech.
Top bankers have been calling administration officials this week, frantically asking "how bad" the speech would be for Wall Street and whether they would be taken to the woodshed, administration officials said.
"We do feel like we're winning so it's not a slash-and-burn speech," a senior official said, noting that the rhetoric would be tougher if Obama felt the reform bill was in peril.
"We don't need to do that right now," the official said.
But senior officials noted that Obama will challenge Wall Street.
Obama will charge that the financial crisis was "born of a failure of responsibility -- from Wall Street to Washington -- that brought down many of the world's largest financial firms and nearly dragged our economy into a second Great Depression," according to excerpts of the address the White House released Thursday.
The president also will reiterate five key principles he wants to see in Wall Street reform legislation.
They include ending the idea of a bank being too big to fail, enacting the Volcker rule -- named for former Federal Reserve Chairman Paul Volcker -- that limits the risks banks can take, making complicated financial trades known as derivatives more transparent, creating a consumer financial protection agency and allowing investors to have more say in the compensation of bank company executives.
Once back in Washington, the president is expected to ask congressional leaders for bipartisan support on a reform bill.
On Wednesday, the Senate Agriculture Committee voted 13-8 in favor of a bill that would impose regulations on the complex system of Wall Street trades known as derivatives.
Watch how derivatives work
Senate leaders will look at merging the measure with a financial regulations reform bill already passed by the Senate Banking Committee that is headed for debate by the full chamber.
The House of Representatives passed a regulatory overhaul in December.
The White House has started some preliminary discussions on Capitol Hill, with Obama meeting with congressional leaders last week in the push for regulatory overhaul.
"All of us recognize that we cannot have a circumstance in which a meltdown in the financial sector once again puts the entire economy in peril," Obama said. "I'm absolutely confident that we can work out an effective bipartisan package that assures that we never have too big to fail again."
Obama is expected to end his speech by quoting a Time magazine article featuring bankers saying if reform passes it will be a disaster, the officials said.
The article is from the 1930s -- during the fight over creation of the Federal Deposit Insurance Corp.
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