News / USA

Obama Insists On Controls On Derivatives

Kent Klein

U.S. President Barack Obama says he will veto any financial reform legislation that does not strongly regulate derivatives, the complex transactions that critics say started the economic crisis.  Opposition Republicans in the Senate say they are solidly against the bill.

U.S. lawmakers are considering legislation that would regulate derivatives for the first time.  President Obama says any financial overhaul bill that does not, will not receive his signature.

"I will veto legislation that does not bring the derivatives market under control and some sort of regulatory framework that assures that we do not have the same kind of crisis that we have seen in the past," he said.

Critics say derivatives, like the mortgage-backed securities whose values plummeted in the 2008 housing crisis, played a major role in driving the U.S. economy into crisis.

At a White House meeting Friday, Mr. Obama said derivatives caused big problems at the failed insurance company AIG, and could bring more trouble if not brought under control. "There are literally trillions of dollars sloshing around this market that basically changes hands under the cover of darkness.  When things go wrong, as they did in AIG, they can bring down the entire economy, and that is why we have got to bring more transparency and oversight when it comes to derivatives," he said.

The president wants legislation that would force Wall Street firms to pay into a fund that would help failing banks, so taxpayers would not have to pay the cost.

The top Senate Republican, Minority Leader Mitch McConnell, said Friday he has signatures from 40 other Republican Senators opposing the bill and demanding further negotiations.

Mr. Obama accused the opposition of putting taxpayers in financial jeopardy. "And anyone who opposes this reform is going to be leaving taxpayers on the hook if a crisis like the one that we have just seen ever happens again, and I consider that unacceptable," he said.

Republicans in Congress say the president's proposed emergency fund would lead to endless buyouts of financial firms. Mr. Obama says there will be no more buyouts.

Meanwhile, the U.S. government is accusing the powerful investment firm Goldman Sachs of defrauding investors.

The Securities and Exchange Commission says in a civil complaint that the company failed to disclose conflicts of interest in mortgage investments it sold as the housing market was collapsing in 2007.

The agency says two European banks that bought securities from Goldman Sachs lost almost $1 billion.  The firm denies the allegations.

Goldman Sachs shares fell more than 12 percent on Friday, and the Dow Jones Industrial Average dropped about 126 points, more than one percent.

You May Like

Mood Tense Ahead of Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

South Africa’s 'Open Mosque' Admits Everyone, Including Critics

Open Mosque founder plans to welcome gay worshipers and allow women to lead prayers More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid