Obama presses banker chiefs to lend more
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U.S. President Barack Obama on Monday pressed executives of top U.S. banks to make more loans to small business and accept the necessity of greater regulation.
"Our nation's banks play and have always played a crucial role in our national economy," Obama told reporters after his meeting with the CEOs of 12 of American largest financial institutions at the White House.
"So it's clear that each of us has a stake in ensuring the strength and the vitality of the financial system," said the president.
Obama convened a similar meeting with bank chiefs in March. The banking industry has reduced lending for five consecutive quarters, even as it has regained profitability thanks to vast public aid.
"So my main message in today's meeting was very simple," Obama told reporters. "America's banks received extraordinary assistance from American taxpayers to rebuild their industry and now that they're back on their feet we expect an extraordinary commitment from them to help rebuild our economy."
He said that he has heard a lot from business owners and entrepreneurs across America "that despite their best efforts, they're unable to get loans."
"Now, no one wants banks making the kinds of risky loans that got us into this situation in the first place," said Obama. "And it's true that regulators are requiring them to hold more of their capital as a hedge against the kind of problems that we saw last year."
But he called on the bank chiefs to help get the crippled American economy moving again.
"Given the difficulty business people are having as lending has declined and given the exceptional assistance banks received to get them through a difficult time, we expect them to explore every responsible way to help get our economy moving again," said the president.
Meanwhile, Obama urged the financial firms to get behind legislation to overhaul financial regulation.
"We also discussed the need to pass meaningful financial reform that will protect American consumers from exploitation and American -- the American economy from another financial crisis of the kind which we just came out of," said the president.
The U.S. House of Representatives passed on Friday the most sweeping financial regulatory overhaul in more than 70 years, a crucial step for one of the Obama administration's key reforms.
The legislation was designed to address the shortfalls that led to the worst financial crisis since the Great Depression of 1930s.
It will expand the government's power to break up companies that threaten the economy, and create a new Consumer Financial Protection Agency to oversee consumer banking transactions.
Obama said he has noted the resistance of many of the financial sectors to these reforms.
"The industry has lobbied vigorously against some of them, some of these reforms on Capitol Hill," he said.
"So I made it clear that it is both in the country's interests and ultimately in the financial industry's interest to have updated rules of the road to prevent abuse and excess," he stressed.
