| WASHINGTON, July 2
WASHINGTON, July 2 President Barack Obama said
on Wednesday he wants additional financial reforms to make sure
banks are not tempted to make risky bets that can pay off
handsomely for a few if they succeed but can cause widely felt
disruptions if they flop.
Obama said in an interview with American Public Media's
"Marketplace" that he is looking for ways to reform the bank
profit and compensation structures to rein in incentives for
traders to take big risks.
Reforms put in place after the financial crisis that
triggered the painful 2007-2009 recession were a good start, but
more is needed, he said, according to a transcript.
"That is an unfinished piece of business," he said in a
radio interview scheduled to air on Thursday.
Obama said he believes retooling banks will help address
such concerns. In big banks, trading desks generate big profits,
but traders can avoid being held accountable for trades that
lose money by moving on, he said.
"You can generate a huge amount of bonuses by making some
big bets; you will be rewarded on the upside," he said. "If you
make a really bad bet, a lot of times you've already banked all
Financial reforms have provided some protection for
taxpayers, but not enough he said.
"That's going to require some further reforms," he said.
"That's going to require us looking at additional steps that we
can take." He did not go into the details or timing of measures
he may be considering.
A regulation published in December barred banks from making
big trading bets with their own money, shutting down what was a
hugely profitable business for Wall Street before the credit
The measure, known as the Volcker rule, was a late addition
to the 2010 Dodd-Frank Wall Street reform law and was aimed at
ensuring that banks can't make speculative trades that are so
large and risky that they threaten individual firms or the wider
(Reporting By Mark Felsenthal; Editing by Ken Wills)