Obama calls for more bank supervision

Democratic presidential candidate Barack Obama called for an overhaul of regulations governing banks and other financial institutions following the collapse of the subprime mortgage market. In his speech today at New York’s Cooper Union, Sen. Obama, D-Ill., proposed giving the Federal Reserve greater supervisory authority when it acts as a "lender of last resort," adding that a "patchwork of regulators” were “unable or unwilling" to protect the American people when the subprime mortgage crisis took a "reckless and unsustainable turn." He called for stronger liquidity capital requirements for financial companies and said that government regulations governing Wall Street firms had to be changed to so that agencies didn't compete against each other. ``Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices,'' said Mr. Obama. ``We let the special interests put their thumbs on the economic scales.'' "The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both," he added. Mr. Obama also proposed a stimulus that will provide immediate relief to areas hardest hit by the housing crisis, and a significant extension of unemployment insurance for those who are out of work. "If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling," Mr. Obama said. Presidential candidates Sen. Hillary Clinton, D-N.Y., and Sen. McCain, R-Ariz., have also called for changes in mortgage lending practices, according to MarketWatch. Ms. Clinton called for extending $30 billion to help states fight foreclosures. Mr. McCain wants mortgage lenders to step in and help cash-strapped but creditworthy borrowers with their loans.