Washington: President Barack Obama said the auto industry's revival, including General Motors Company's repayment of its government loans, is "encouraging" and urged passage of the financial-services overhaul to prevent future bailouts.
"Part of what led to the crisis in our auto industry, and one of the main causes of the economic downturn, were problems in our fin-ancial sector," Obama said in his weekly radio and internet address. "Wall Street firms took enormous, irresponsible risks."
"It's essential that we learn the lessons of this crisis, or we risk repeating it," he said.
Obama has ramped up administration lobbying for legislation to set up a new regulator within the Federal Reserve, to guard consumers against abuse and deception in such instruments as mortgages, credit cards or loans. The measure would also create a mechanism to dismantle important financial firms when they fail, and strengthen oversight of derivatives and hedge funds.
The measure, sponsored by Senate Banking Committee Chairman Christopher Dodd, is necessary to "restore trust and confidence in our markets," even though the economy is showing signs of recovery, Obama said. It would "put an end — once and for all — to taxpayer bailouts," he said.
Senate Talks
The bill is scheduled for a procedural vote in the Senate on April 26. Dodd and the banking panel's top Republican, Richard Shelby of Alabama, are negotiating to incorporate Republican ideas into the measure. Obama sought to keep the pressure on April 22, challenging Wall Street in a New York speech to join rather than fight the overhaul effort.
In his radio address, Obama recalled criticism for his decision to help the auto industry, which shed 400,000 jobs over the course of 2008.
"Many believed this was a fool's errand," he said.
The US put up about $50 billion (Dh183.6 billion) in aid for GM, the biggest domestic carmaker, No 3 Chrysler received $12.5 billion and gave control and a 20 per cent stake to Italy's Fiat SpA, which agreed to share technology and help expand exports.
It was US aid that saved Detroit-based GM and Auburn Hills, Michigan-based Chrysler Group LLC, Obama said.
"We decided that while providing additional assistance was a risk, the far greater risk to families and communities across our country was to do nothing," he said.
Obama said the "auto industry is more stable today," and the "economy is on a better footing."
General Motors Company repaid the last $4.7 billion in US loans on April 21 and Chrysler Group LLC has posted a first- quarter operating profit of $143 million.
