President Barack Obama is calling on Congress to pass strong financial sector regulation and oversight to prevent future crises and restore "accountability, transparency and trust in our financial markets."
In remarks prepared for delivery Wednesday afternoon, the president offers no specific regulatory framework, but calls for "core principles." Among them are consumer protections, accountability for executives and a regulatory plan that covers a broad series of financial transactions that have escaped regulation in the past.
Obama was scheduled to meet Wednesday with Treasury Secretary Timothy Geithner and with the chairmen and ranking Republicans of the House and Senate committees that would be charged with drafting the regulations.
"Let me be clear: the choice we face is not between an oppressive government-run economy and a chaotic and unforgiving capitalism," Obama says, according to remarks obtained by The Associated Press. "Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors."
An administration official said Obama wants Congress to work on the regulatory overhaul in the next several weeks, before April's meeting of the world's 20 major economies. The official spoke on the condition of anonymity because the Wednesday session had not yet occurred.
"We must recognize that the challenges we face are not just American challenges, they are global challenges," Obama says, according to the prepared excerpts. "So as we work to set high regulatory standards here in the U.S., we must challenge the world to do the same."
Among those scheduled to attend Wednesday's meeting at the White House is House Financial Services Committee Chairman Barney Frank. The Massachusetts Democrat has already begun working on legislation that would establish a regulator to oversee the kind of systemic risks that led to the market free fall last year.
Frank has proposed that the task be placed in the hands of the Federal Reserve. In the Senate, the chairman of the Banking Committee, Christopher Dodd of Connecticut, has been cooler to the idea of placing that oversight with the Fed.
"We will not always see eye to eye in this work," Obama cautions in his remarks.
Obama's call for overhauling financial sector regulation is ballast to his call for continued government action to shore up the ailing industry. Members of Congress, echoing public sentiment, have been wary of how the government is spending $700 billion designed to loosen credit by infusing capital into banks.
In his address to a joint session of Congress Monday, Obama made it clear that he was aware of the sentiment and cast the banking bailout as a needed remedy to help families and small businesses.
"This plan will require significant resources from the federal government -- and, yes, probably more than we've already set aside," he said Tuesday. He then added: "I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can't pay its workers, or the family that has saved and still can't get a mortgage."