On the one-year anniversary of the collapse of financial giant Lehman Brothers, President Obama said the economic storms of the past two years "are beginning to break," but he issued a stern warning to the nation's financial firms that as the economy recovers, they cannot revert to the days of "reckless behavior and unchecked excess."
"The old ways that led to this crisis cannot stand," the president said. "History cannot be allowed to repeat itself."
Obama delivered his remarks at Federal Hall in the heart of New York's financial district, just steps away from the New York Stock Exchange, to an audience that included members of Congress, the financial community and key members of his administration's economic team.
The president said Wall Street firms need to take responsibility for past excesses and learn from mistakes.
"Normalcy cannot lead to complacency," Obama said. "Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall."
The president spread the blame for last year's economic meltdown, saying it falls on the shoulders of those on Wall Street, in Washington and across America.
"[W]hat took place one year ago was not merely a failure of regulation or legislation; it was not merely a failure of oversight or foresight," Obama said. "It was a failure of responsibility that allowed Washington to become a place where problems -- including structural problems in our financial system -- were ignored rather than solved. It was a failure of responsibility that led homebuyers and derivative traders alike to take reckless risks they couldn't afford."
Obama said Wall Street firms who were bailed out by the government last year now need to play a significant role in rebuilding trust among the American people.
"The fact is, many of the firms that are now returning to prosperity owe a debt to the American people," the president said. "Though they were not the cause of the crisis, American taxpayers through their government took extraordinary action to stabilize the financial industry."
Tens of thousands gathered in Washington this weekend to protest what they said was the Obama administration's irresponsible expansion of government and big spending. Today Obama said the need for government involvement in the financial system is "waning."
"After months in which public dollars were flowing into our financial system, we are finally beginning to see money flowing back to the taxpayers," he said.
Obama called for immediate action on regulatory reform, reiterating his support for new rules to protect American consumers and a Consumer Financial Protection Agency to enforce the rules. With the G-20 economic summit taking place next week in Pittsburgh, Obama said world leaders will address ways "to spur global demand but also to address the underlying problems that caused such a deep and lasting global recession."
Obama defended his administration's recent decision to levy higher tariffs on imported Chinese tires saying that the move was "not to be provocative or to promote self-defeating protectionism" but necessary to maintain an "open and free trading system."
"This administration is committed to pursuing expanded trade and new trade agreements. It is absolutely essential to our economic future," the president said. "But no trading system will work if we fail to enforce our trade agreements."