WASHINGTON (Reuters) - President Barack Obama on Wednesday enacted more comprehensive overhaul of financial regulation since the Great Depression, promising to stop risky behavior on Wall Street that threatened the U.S. economy.
groups of influential business people aligned to criticize the new law, stressing Obama's difficult relationship with the business community of America. Some on Wall Street, however, welcomed the clarity provided by law after months of wrangling in Congress over what should be in the legislation.
The law, which received final approval from the Senate last week, targets the type of Wall Street risk-taking that has helped trigger a global financial crisis in 2007-2009 and aims to strengthen consumer protection.
Obama faces voter unrest over bailout of Wall Street who have failed to generate a strong recovery from Main Street job, promised taxpayers would never again have to spend billions of dollars into failing companies to protect the economy.
"Because of this law, the American people will never be asked to foot the bill for mistakes on Wall Street, Obama said during a signing ceremony attended by some Wall Street bankers, heads of business and legislators.
"There will be no more bailouts funded by taxpayers. Period."
With Republicans ready to make gains in Congress in November elections, Democrats Barack Obama are eager to show voters they have taken steps to tame an industry that has dragged the economy into its deepest recession in 70 years.
Obama and the Democrats have yet to gain political ground of the legislative victory, with the Americans always worried a rate of 9.5 per cent unemployment, deficits.
The financial regulatory reforms have been a major accomplishment of Obama and his ambitious national program. Earlier this year, he signed into law sweeping reforms of the U.S. system of health 2.5 trillion dollars.
Financial reforms Democrats won few friends on Wall Street. wealthy donors have begun to direct more of campaign contributions to Republicans who voted massively against the reforms.
"Unscrupulous Lenders"
Obama had harsh words for "unscrupulous" lenders and others, he said that the risks had been threatening the economy. He said that the new law was intended to prevent abuses and excesses of Wall Street and stopping taxpayer subsidies to failing firms.
The legislation would provide certainty "for everyone from bankers to farmers to business owners. And unless your business model is based on reducing corners or steal your customers, you have nothing to fear this reform, Obama said.
The American Chamber of Commerce, a group of influential businessmen who often criticizes the economic policies of Obama, said he would have the opposite effect.
"Such a range, the bill represents a sweeping law with unintended consequences that creates more uncertainty for U.S. companies," said Thomas J. Donohue, President and Chief Executive Officer of the House.
The American Bankers Association has expressed its disappointment with the legislation, saying it "contains a tsunami of new rules and restrictions for traditional banks that have nothing to do with the origin of the financial crisis in the first place."
Much of its impact will depend on how it is put into practice. Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, said the legislation enhances transparency and provides regulatory tools to better regulate markets, but many questions remain unanswered.
"This is a bill extensively with many facets, hundreds where regulators still need to put some more meat on the bones. How we do it, and when we do, are questions that will really tell if this bill meets the expectations of his supporters, he said.
"Controversial Fake"
Ruth Porat, head of financial giant Morgan Stanley, which on Wednesday reported higher than expected profits in the second quarter, said the company was pleased that the bill signed on to "a little light on the issues. "
The bill is potentially lucrative business venture of OTC derivatives and is intended to force banks to end trading for their own profits.
It creates an Office of Consumer Financial Protection to regulate products ranging from credit cards to mortgages. The administration considered this a most critical parts of the bill, but the banks, he fought bitterly.
Obama has received repeated ovations during his speech and applause was reserved in his praise of three Republican lawmakers who broke ranks from their party to vote for the law.
The White House said Citigroup Inc. CEO Vikram Pandit, Bob Diamond, Barclays Plc and President Gerald Hassell, president of Bank of New York Mellon, attended the bill-signing.
JPMorgan Chase & Co Jamie Dimon CEO was one of the few great leaders of the Bank are not invited, a spokesman for the second-largest U.S. bank.
Dimon once enjoyed a close relationship with Obama, but he later emerged as a vocal critic of efforts to reform the U.S. banking sector.
The White House has dismissed as a controversial "false" media reports on the failure to invite business leaders as Dimon.
"CEOs who opposed the reform did not expect to be invited to the signing of the bill and not one has complained to the administration," the spokesman said the White House Jen Psaki.
(Additional reporting by Matt Spetalnick, Christopher Doering, Maria ASPAN, Elinor Comlay, Joe Rauch, Steve Eder, Dan Wilchins, Patricia Zengerle and Steve Holland, French version by David Storey)
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