US President Barack Obama says "not true" that Wall Street regulation too lax

US President Barack Obama speaks following a meeting with financial regulators at the White House on Monday. On his left is Federal Reserve chair Janet Yellen.
US President Barack Obama speaks following a meeting with financial regulators at the White House on Monday. On his left is Federal Reserve chair Janet Yellen.PHOTO: AFP

WASHINGTON (REUTERS) - US President Barack Obama on Monday defended his efforts to rein in Wall Street, telling Americans on both sides of the political spectrum that his administration cracked down on banks and trading firms after the financial crisis of 2007-2009.

"I want to emphasise this because it is popular in the media and the political discourse, both on the left and the right, to suggest that the crisis happened and nothing happened. That is not true," Obama told reporters, flanked by Federal Reserve Chair Janet Yellen and other top regulators.

He said regulators appear set by the end of the year to have achieved most of the goals he set out for the financial system in 2008, when he first took office, although he noted there was still work to do on rules for hedge funds and asset managers in what he called the "shadow banking system".

"One of our projects is to make sure that we are covering some of those potential gaps," he said. "We may need at some point help from Congress to do that."

Regulators also need to complete rules on executive compensation to make sure Wall Street is "less incentivised to take big reckless risks that could end up harming our financial sector", he said.

Obama told reporters the Republican-controlled Congress has tried to weaken regulations established after the financial crisis and "starve" regulators with budget cuts.