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President Obama Urges Business To Help Rather Than Block Financial Reform

U.S. President Barack Obama says he expects "vigorous" debate on proposed reforms of the financial regulatory system, as the Senate approaches its first votes on the complex and controversial effort.

During a Washington speech to a business group Tuesday, Mr. Obama vowed not to allow business interests to water down what he called "common sense" reforms. He urged financial firms to hold constructive talks on disagreements with the administration, and he said U.S. economic success depends on the "innovation and enterprise" of American business.

Among the many amendments that may come to a vote in the Senate is one proposed by California Democrat Barbara Boxer. It says taxpayer funds must never again be used to rescue large financial firms in danger of collapse.
Senators also are expected to debate the need for a new agency to protect consumers of financial services.

There is word that Connecticut Democrat Christopher Dodd and Alabama Republican Richard Shelby have reached a compromise to drop a proposal that would create a $50 billion fund to help pay for liquidating the assets of failed banks.

Another controversial part of the bill involves the trading of the complex investment vehicles called derivatives, which played a role in the 2008 economic meltdown. The bill would require investment companies to spin off their derivatives divisions into separate companies.

The House of Representatives passed its version of the legislation last year. Once the Senate passes a financial reform plan, the differences between the two bills will have to be reconciled and the compromise version sent to President Obama for final approval.

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