Obama urges swift passage of financial reform

WASHINGTON (Reuters) - President Barack Obama welcomed a U.S. Senate vote on Wednesday opening the way to debate on a Wall Street regulatory overhaul and said he hoped it would lead to swift passage of a reform bill.

"It was the right thing to do," Obama told reporters aboard Air Force One after Republican lawmakers dropped their effort to block the Senate from taking up the Democratic bill to revamp financial rules.

The deal, which ends a three-day impasse, was a milestone for Obama's push to tighten bank and capital market oversight after the worst financial crisis in generations. Formal debate on the bill will begin at 12:15 p.m. (1615 GMT) on Thursday, said Senate Democratic Leader Harry Reid.

"This shouldn't have to be a partisan issue. Everybody was hurt by the crisis on Wall Street," Obama said. "I hope that we can get this done quickly, reconcile it with the work that was done on the House side and then I can sign this bill into law very soon."

Obama spoke to reporters on the way back to Washington from a campaign-style swing through the Midwestern heartland where he insisted that Americans should not have to wait "another day" for financial reform.

With U.S. unemployment just below 10 percent, Americans are anxious about the country's finances, nudging Obama's approval ratings to 50 percent or below and dimming his fellow Democrats' prospects in the November congressional elections.

Republicans acknowledge a need for reform but say the Democrats' bill is a government overreach, signaling the congressional fight is far from over.

Obama declined to comment on fraud allegations against powerful investment bank Goldman Sachs, widely seen as helping to bolster his case for regulatory reform.

"Some of the behavior generally on Wall Street, even if it's legal, doesn't seem to serve an economic purpose," Obama said, insisting that greater "transparency, openness, clarity" was needed in the financial system.

"It may reduce the bonuses for some of the players on Wall Street, but we'll end up having a safe, more secure financial system, and I think banks and other financial institutions can get back to making money the old-fashioned way by lending it to companies to build business and create jobs," he said.

(Writing by Matt Spetalnick; Editing by Eric Walsh)