US President Barack Obama recalled on Monday the fifth anniversary of the bankruptcy of investment bank Lehman Brother , which triggered the biggest financial crisis since the crash of 1929, and recalled that there is still work to be done to prevent the recurrence of problems that led to those crises.
Obama says that when Lehman filed for bankruptcy he began “the worst crisis of our lives” In a media appearance, the president recalled September 15, 2008, the day the giant Lehman Brothers filed for bankruptcy, as the historical event that led to “the worst economic crisis of our lives”.
“We have cleared the ruins of the financial crisis and we have begun to lay the foundations for a new prosperity and economic growth ,” Obama said today, recalling that the US has once again created wealth and has gone from an unemployment rate of more than 10% to 7.3%.
Obama said that since his arrival at the White House in 2009, his priority has been to put an end to the effects of a crisis that ruined large financial institutions, sank Wall Street and brought the US to its worst recession since World War II, effects that They are still noticeable in the global economy.
“In a matter of a few days and weeks of fear, some of the biggest investment banks in the world went bankrupt, markets collapsed and banks stopped giving loans to families and small businesses,” the president recalled. At the end of 2008, the Gross Domestic Product of the first world economy fell at an annualized rate of 8 percent and some 800,000 jobs were destroyed per month, something that dragged all the major world economies and widened with a public debt crisis like the one that suffers Europe.
The president recalled that there is work to be done to reduce inequality in the United States. Obama stressed that his government encouraged spending on infrastructure, on public services, modified mortgage regulations, rescued the automotive sector and got approval for a health reform to extend the medical coverage to the most vulnerable.
However, he acknowledged that “we are not where we need to be” and there is work to be done to reduce inequality in the United States between rich and poor and to put definitively the new banking regulations before the end of the year.
It’s been more than three years since Congress approved the financial reform known as ‘Dodd-Frank’, but even two thirds of the regulations contained in that mammoth legislative project have not been implemented, even though they are seen by the Obama administration as the basis to prevent a new financial collapse .
In a statement, Treasury Secretary Jack Lew described the 2008 crisis as a unique event in modern economic history, which was not due to a single cause, but to an accumulation of “excessive risks, too much debt and a structure regulator out of phase “.
Lew, who was a top investment executive at Citigroup between 2006 and 2008, called for a rush to complete the remaining elements of financial regulations, since “it’s not about writing the new rules and then leaving the field.”
The causes of the crisis now enjoy golden retreats President Obama said that, after the progress of the last five years, many are still “struggling to stay in the middle class” and it is necessary “to put ladders of opportunity for the poorest”, and he recalled that the richest 1% of Americans own 20% of the country’s wealth. With this motive, he requested the commitment of the Congress, especially of the Republican opposition, to approve a budget that replaces the automatic cuts initiated at the beginning of this year, and measures to finance public investments and improvements in education and health.
Meanwhile, five years later, some of the executives in the most relevant positions on Wall Street and responsible for not having warned of the dangers of credit practices too risky, such as “subprime mortgages”, now enjoy golden retreats, remember the means .
Richard Fuld, CEO of Lehman Brothers when he filed for bankruptcy, now owns a discreet firm of advisors and keeps his fortune of more than 500 million he amassed between 2000 and 2007 thanks to practices considered abusive and fraudulent.
Despite the profound changes in Wall Street, many of those responsible for the irresponsible behavior that led to the 2008 crisis have not responded criminally for their management.
Jimmy Cayne, CEO of Bear Stearns, another of the big promoters of “junk mortgages,” retired with a fortune of nearly $ 90 million in premiums and spends his days in bridge tournaments.