It appears some bank have not learnt from the financial crisis. Perhaps they enjoy taking risks and have forgotten the difference between a well calculated risk from an irresponsible one.

Barack Obama has had to give them a stern reprimand for refusing to grow up from the events of the financial crisis. It seems some on seeing current gains being made in recovery have resumed their old lives of extravagance even in the face of struggling recovery.

Barak Obama is leaving no stone unturned to turn the economy around to full recovery. He is following the stimulus package and first of reforms with new set of proposals of far-reaching reforms which he admits are the toughest since the Great Depression but which must be followed through to ensure stable recovery.

Crucial recovery

The financial system has shown signs of gradual recovery (this is still being debated by analysts) but the process is not complete. Any miscalculated actions at this stage could lead to another downturn. Simply, the US is in a critical moment. Any missteps and miss-actions could jeopardize the entire economy.

The causes of the collapse of the Lehman Brothers bank could not have been forgotten in a year. They may have started the current crisis but may not be blamed for another one if banks do not put on hold their old ways. This time the stakes are even greater – the entire US economy is tied up in the banks – any irresponsible actions could lead to great damage to the national economy and indeed the global economy.

Well, Obama says, grow up or you will groan. One thing is sure, they should not dream of another bailout if they go bust.

The new reforms

In fact, banks would not be allowed to groan.

President Obama’s proposed new set of reforms include the following:

*  the central bank, the Federal Reserve, to receive greater control over big financial corporations: they will have the power to take control of banks whose collapse could jeopardize the entire US economy

* A new regulator, the Consumer Financial Protection Agency, to supervise mortgages, car loans and credit cards

* In addition, the Federal Trade Commission would have more control over protection of consumers.

President Obama is hopeful that such additional regulations could be the extra touch needed to safeguard the US economy from another financial crisis.

Resistance

These proposals have been rejected by the banking industry and currently embattled in Congress. But will Obama back down?

President Barak Obama vowed to serve the American people and not any particular group and he looks resolute on this.

The banks must be prepared to come out with very serious proposals to be taken seriously by President Obama.

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