News / USA

Obama: Financial Reform Will 'Prevent Bailouts'

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U.S. President Barack Obama is urging lawmakers to pass a bill that he says will prevent a repeat of the financial crisis that plunged the U.S. and global economies into recession.

Wednesday, the president rejected Republican criticism of the proposed legislation, saying he is absolutely confident that the bill will "prevent bailouts."  He said it is unacceptable to expect taxpayers to pay for the failings of big financial firms.

During the financial crisis, the U.S. government gave hundreds of billions of dollars in emergency loans to prop up major financial firms so they would not collapse and damage the economy.  Some of that money has been repaid.

Earlier, U.S. Senate Republican leader Mitch McConnell said the proposal would force the country to pay for "endless" bailouts.

In spite of the criticism from key opposition figures, Mr. Obama said he is confident Democratic and Republican lawmakers can agree on an effective reform bill.

He also said the measure must effectively regulate highly complex investments known as derivatives, saying that until now, the complicated financial instruments had been allowed to operate in the shadows.

Some economists say some financial firms failed to understand the risks of derivatives, which helped spark the financial crisis.

Some information for this report was provided by AP, AFP and Reuters.

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