Obama wants Wall Street to know change is coming

It’s been a year since the collapse of Lehman Bros. touched off a September we’d rather not remember.

A year of houses of cards, trillions of dollars of wealth destruction, and a federal Troubled Asset Relief Program that provided a lot of relief but never touched those troubled assets.

How are you feeling now?

Still angry about the financial crisis and bank bailouts, based on comments sent to me via e-mail or phone.

That’s why it seems odd to read reports that federal efforts to change the financial regulatory system are stalled, because so little has changed in the last 12 months. Outside of new rules for the credit-card industry, the same environment of incentives, risk-taking, and market opacity exists today that did last year.

Consumer anger carries change only so far. That’s why President Obama was in New York yesterday to renew the push for his menu of financial-sector reforms, which include creating the Consumer Financial Protection Agency and expanding the Federal Reserve powers to regulate financial institutions that pose systemic risk.

There was nothing new in his speech. All of his priorities have been addressed in congressional hearings this year. Rather, the president was reminding Wall Street and Congress that doing nothing is not an option.

While you would expect the banking industry to resist major regulatory change, it’s illustrative that federal regulators have shown a distressing lack of resolve as well. Within the Obama administration itself, the heads of the alphabet soup of the CFTC, FDIC, OCC, and SEC have publicly squabbled over whose mission should be changed and how.

With Rome, or at least Wall Street, not burning, President Obama reminded all actors, good and bad, that the taxpayers were not amused: “They shouldered the burden of the bailout, and they are still bearing the burden of the fallout - in lost jobs and lost homes and lost opportunities.”

That’s a good reality check. Here’s another: The biggest U.S. banks are now bigger, not smaller. These behemoths may be needed to support the nascent economic recovery, but even after adding more capital, they still pose as much risk to the system now as they did when Lehman was allowed to fail.