US:Obama asks Congress for power to shut collapsed finance firms
25 Mar 2009 4:17 AM
WASHINGTON, March 24 AFP - US President Barack Obama says he hopes to convince Congress to quickly hand him the power to close collapsed finance firms outside the banking sector which pose a systemic economic risk.
Obama was asked about the request by the US Treasury and Federal Reserve chiefs for unprecedented powers to seize financial companies in a bid to maintain economic stability, after meeting Australia's Prime Minister Kevin Rudd in Washington on Tuesday.
"I hope it doesn't take too long to convince Congress," Obama said.
"Right now, we do not have resolution authority for a non bank institution like AIG that is comparable to what we have for banks that get into trouble, " he said, referring to US insurance giant American International Group (AIG), which received a multibillion-dollar government bailout in September last year.
"In the absence of such capacity, you end up with the situation that we have been in, (with) an institution that poses a systemic risk to the system but a lack of capacity to shut it down in order to renegotiate contracts.
"We are hard at work to put forward a detailed proposal. We will work in consultation with members of Congress.
"That will be just one phase of a broader regulatory framework that we are going to have to put in place to prevent these kinds of crises happening again."
