Washington DC – Oregon’s Senator Jeff Merkley made the following statement Thursday morning in advance of President Obama’s announcement on financial regulation:
“For months, I’ve been pushing for the reestablishment of a firewall between risky activities and depository lending. This is an absolutely necessary step in shutting down the casino-like gambling that destroyed our economy and endangered the jobs, homes and savings of the American people. The president’s support is a critical turning point in the effort to see these firewalls enacted in a financial reform package this year.
“Proprietary trading, where banks bet with their own capital, is a recent innovation and has turned out to be a bad deal for both our financial institutions and the taxpayer. Over the last fifteen years, as the legal and ethical prohibitions on high-risk trading were removed, banks raced to increase their leverage and gamble with their balance sheets. As recent history has demonstrated, these dangerous bets resulted in financial collapse, both for Wall Street and American families. Common-sense limits on high risk activities will make our economy more stable and less reliant on government intervention.
“To succeed, banks have to return to their mission of providing customers with prudent lending and investment opportunities instead of aspiring to be hedge funds. Success for the American financial system isn’t defined by record profits or massive bonuses. Success is the ability to lend to small businesses, to create jobs, and to drive real economic growth.
“The restoration of rules that prevent banks from gambling with their depositors’ money is crucial to righting our economic ship and ensuring the future stability of our financial system. I look forward to working with President Obama, Banking Committee Chairman Dodd, and my Senate colleagues to reestablish the firewall between risky activities and depository lending and make banking boring again.”
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