With President Obama heading to New York City Thursday to make his case for financial reform, Treasury Secretary Timothy Geithner said he is confident that if reform is enacted the government will never again step in and rescue big banks as it did in 2008.
"You can't run a system in which private investors or their executives can take risk on the expectation the government is going to come in and protect them," Geithner told "Good Morning America's" George Stephanopoulos.
Tune in to "Good Morning America" Thursday at 7 a.m. ET to watch more of Stephanopoulos' interview with the Treasury secretary.
Geithner told Stephanopoulos that if banks expect the government to save them again it would be a "recipe for disaster."
Earlier this week, Geithner met with Republicans on Capitol Hill in hopes of gaining support for the legislation when a bipartisan bill seemed unlikely. But now both Republicans and Democrats have said an agreement may be possible, perhaps as soon as the end of the week.
The news that Goldman Sachs made $3.5 billion in quarterly profits, which was released days after the Securities and Exchange Commission announced investor fraud charges against the company, is seen as playing a role in the turn towards a bipartisan agreement.
Nine Republicans on the House Oversight Committee questioned the timing of the SEC's charges against Goldman, wondering whether it was done to increase support for financial regulation reform.
Goldman Sachs Profits Spurs Calls for Financial Reform
SEC Chairman Mary Schapiro today denied that charge, saying in a statement, "The SEC is an independent law enforcement agency. We do not coordinate our enforcement actions with the White House, Congress or political committees. We do not time our cases around political events or the legislative calendar."
The Obama administration is pushing for an overhaul of the regulations on the $600 trillion derivatives market, which many point to as one of the causes of the financial crisis, as well as the creation of a new consumer protection agency that would have the power to stop any abusive practices within the financial industry.
"To us the choices are clear -- common-sense rules and regulations in financial markets that protect consumers, taxpayers, and I might add, the overall economy," Vice President Biden said in a speech Tuesday.
One contentious point in the financial regulations overhaul is the creation of a $50 billion fund that banks would pay for that would act as an insurance policy should the banks fail again. But Republicans have argued that the fund is just another bailout, and if it does not cover the banks' losses, then the taxpayers would again be on the hook for the remainder of the money.
Obama will make his case in Wall Street's back yard during a speech Thursday at The Cooper Union in New York City.
"The president is going to talk in clear terms about the need for quick action on putting new rules of the road in place to make sure that Wall Street has regulations to act responsibly and make sure that we don't find ourselves in the kind of crisis that we did in September 2008," deputy White House press secretary Bill Burton said Tuesday.