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NEW YORK CITY-A year after the collapse of Lehman Brothers symbolized the upheaval in the financial services sector, President Barack Obama told a Wall Street audience that regulatory reforms are necessary to prevent another meltdown. Obama offered no new policy proposals in his speech at Federal Hall on Monday afternoon, but warned that “the old ways that led to this crisis cannot stand… Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.”

Touting what he called “the most ambitious overhaul of the financial system since the Great Depression,” Obama said the reforms were intended to provide “clear rules of the road that promote transparency and accountability.” He called on the financial industry to “join us in a constructive effort” to update the rules and regulatory structure.

“I certainly did not run for President to bail out banks or intervene in the capital markets,” Obama told an audience that included commercial real estate executives as well as financial services leaders and political figures. “But it is important to note that the very absence of common-sense regulations able to keep up with a fast-paced financial sector is what created the need for that extraordinary intervention.”

The president highlighted key points of his reform package, which is being shepherded through Congress by Sens. Chris Dodd (D-CT) and Richard Shelby (R-AL) and Rep. Barney Frank (D-MA). Among these would be a newly created Consumer Financial Protection Agency, as well as several measures “to close the loopholes that were at the heart of the crisis” along with addressing “weaknesses in oversight” that led to abuses.

One of the main reasons for the crisis that erupted last September, said Obama, was that “many agencies and regulators were responsible for oversight of individual financial firms and their subsidiaries, but no one was responsible for protecting the whole system. In other words, regulators were charged with seeing the trees, but not the forest.”

Even then, he added, “some firms that posed a ‘systemic risk’ were not regulated as strongly as others, exploiting loopholes in the system to take on greater risk with less scrutiny.” As a result, Obama said, the failure of one firm threatened the viability of others.

With that in mind, the Obama administration is proposing an “oversight council” to bring together regulators from across markets to share information and identify gaps in regulation. The largest, most interconnected financial firms will be required “to meet stronger capital and liquidity requirements and observe greater constraints on their risky behavior,” Obama said Monday. “That’s one of the lessons of the past year.”

He said the administration has also proposed creating “resolution authority” in the event that a large-scale failure occurs and poses a threat to the stability of the financial system. “This is intended to put an end to the idea that some firms are ‘too big to fail,’” said Obama. He called the argument that America has to choose between a completely “unfettered” free market and over-regulation “a false choice.”

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