President Barack Obama's top economic adviser said Friday the U.S. government will implement banking reforms to make a real difference despite lobbying.
"Our challenge now is to put in place a new system" of reforms that wouldn't last for ever but that should be able to function for a generation, Lawrence H. Summers told business leaders at the World Economic Forum.
He said the current situation of having three banking lobbyists per member of Congress raises questions, especially when some of them are, for example, supporting letting financial institutions jack up credit card rates without letting customers know.
He said banks should accept new restraints on their activities and that "they need to think very carefully about their obligations to their customers."
Summers said banks also should be aware of their obligations to their communities in making lending decisions and to contain risk especially when they benefit from taxpayer support when they get into trouble.
He also questioned the bank's "paying out bonuses in large quantities."
"We are going to put in place a set of reforms that will make a real difference," Summers said.
He welcomed the latest figures showing strong economic growth in the U.S., but said now is not the time to celebrate.
The 5.7 percent increase in fourth-quarter growth that came under Obama's economic policies has helped "moved the economy back from the brink of depression," but the figure does not mean that "we are in any position to pop any champagne corks" or be satisfied.
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