MICHELE NORRIS, host:
Tomorrow marks President Obama's 100th day in office. And we're looking back this week at some of his campaign promises. Today - financial regulation. Let's rewind to September just as the presidential race was kicking into high gear. One big investment bank, Lehman Brothers, had failed and others seemed on the verge. Candidate Barack Obama lay blame for the crisis on years of financial deregulation.
President BARACK OBAMA: For eight years we've had policies that have shredded consumer protections, that have loosened oversight and regulation and encouraged outside bonuses to CEOs while ignoring middle-class Americans.
NORRIS: President Obama has begun taking steps to place much tighter controls on Wall Street than his predecessors. But as NPR's Jim Zarroli reports, there are some who say he has not moved fast enough.
JIM ZARROLI: No president in decades has come into office facing the kind of economic crisis that President Obama has confronted. His administration, like the one before it, has had to find ways to prop up a financial sector that sometimes is seen to be declining by the day. But once the dust settles, the administration will face a long-term challenge.
It needs to come up with ways to reform the clunky regulatory apparatus that polices the markets to prevent similar disasters down the road. Former SEC official Lynn Turner says there were high hopes for the Obama administration in the beginning.
Mr. LYNN TURNER (Former Securities and Exchange Commission Official): At that point, the message being sent - and certainly the hopes amongst investors that I spoke to - was that reforms would be on their way should Obama gain the White House.
ZARROLI: But Turner says he's been disappointed by some of the president's appointments who tend to be moderates, like SEC Chairman Mary Schapiro and Treasury Secretary Tim Geithner. Still, he says, it's early, and he's keeping an open mind.
Lately, the Treasury Department and the Federal Reserve have begun sketching out ways to change the system. Peter Wallison is with the American Enterprise Institute.
Mr. PETER WALLISON (American Enterprise Institute): Both of them are taking advantage of the fact that they have a democratic Congress that is much more interested in regulation and are proposing a regulatory structure that is going a lot further than most people would've expected.
ZARROLI: Wallison is talking about an idea floated by Geithner during an appearance before Congress last month. Geithner said the banking crisis was caused in great part by the rise of large complex financial institutions, like AIG, that do multiple things in the markets. When they fail, he said, it's not always clear which government agency has authority over them.
Secretary TIMOTHY GEITHNER (Treasury Department): This crisis has made clear that large interconnected firms and markets need to be brought within a stronger and more conservative regulatory regime.
ZARROLI: Geithner said what's needed is a systemic regulator who would keep tabs on the market as a whole. When a very large company gets in trouble, one whose demise would threaten the financial system as a whole, this regulator would look for ways to stabilize it, like the government now does with banks.
Some critics argue that the Federal Reserve already has the authority to intervene when large institutions are in trouble. It just needs to use it more. The proposal does have the support of one man who matters a lot right now, House Financial Services Committee Chairman Barney Frank. But Frank said recently that Congress won't take up the idea before next fall. That may not seem like such a long wait by Washington's standards. But some people say the administration needs to act faster.
Professor SIMON JOHNSON (MIT): What I've seen so far worries me.
ZARROLI: MIT Professor Simon Johnson says Washington has a historic opportunity to make real changes. But he says the administration appears reluctant to push too far too fast.
Prof. JOHNSON: They're also recognizing the power of the financial lobby and the fact that big banks and other financial institutes have a lot of clout on Capitol Hill. And they don't want to make a proposal that would get shot down and broken into pieces and made meaningless.
ZARROLI: But if the administration waits too long, it may find that the political winds have shifted just enough to thwart any real change. Already the big banks are reporting better than expected profits. If that continues, the sense of urgency about the nation's banks will be lost, and public support for making real change in the markets may erode.
Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.