OBAMA WANTS TOUGH REGS ON WALL STREET

After devoting money and time in search of a rescue for the ailing banking sector, President Barack Obama demanded tough new regulations to keep financial institutions in check and avoid future Wall Street meltdowns.

Obama pressed key lawmakers to overhaul the nation’s financial regulatory scheme to restore “accountability, transparency and trust in our financial markets.”

“We can no longer sustain 21st century markets with 20th century regulation,” Obama said yesterday after meeting with Treasury Secretary Timothy Geithner and the chairmen and top Republicans of the two House and Senate committees charged with writing new regulatory legislation.

Obama leveled a broad indictment of the industry, saying the financial crisis occurred when “Wall Street wrongly presumed the markets would continuously rise and traded in complex financial products without fully evaluating their risks.”

But he also blamed government regulators for not adequately protecting consumers.

Members of Congress, echoing public sentiment, have been wary, if not hostile, toward the $700 billion the government is spending to infuse capital into banks in hope of loosening credit.

In his address to a joint session of Congress Tuesday night, Obama warned that the rescue effort could cost even more.

The president offered no specific regulatory framework, but called for a series of “core principles.”

Among them are consumer protections, accountability for executives and a regulatory plan that covers a broad series of financial transactions that have escaped regulation in the past.

An administration official said Obama wants Congress to work on the regulatory overhaul in the next several weeks, before April’s meeting of the world’s 20 major economies.