NEW YORK - Top economic adviser Lawrence Summers called on financial institutions yesterday to accept new rules in order to help the economic system avoid future “devastating consequences for workers, consumers, and taxpayers.’’
“Financial institutions that have benefited from government support can, should, and must use this moment to think about what they can do for their country - by accepting the necessary regulation to protect the American people,’’ Summers, White House chief economic adviser, said at a conference sponsored by The Economist magazine.
He said banks and other financial institutions must accept the Obama administration’s push for the proposed Consumer Financial Protection Agency, which would oversee mortgages, credit cards, and overdraft practices. Summers said it was “a bit rich’’ for institutions that received billions in taxpayer money to complain that such an agency would inhibit financial innovation.
The House Financial Services Committee is overseeing the creation of the consumer protection agency and is expected to approve it next week. Summers commended the committee for moving to regulate derivatives a day earlier. “A return to the status quo is unacceptable,’’ Summers said.
