[JURIST] US President Barack Obama [official website] on Thursday called for new financial regulations [text], outlining the major components of his proposal. Answering critics who claim that the reforms will increase bailouts, Obama compared the concept behind the proposed financial reforms to the Federal Deposit Insurance Corporation (FDIC)[official website], a government program he says protects confidence in the banking system and protects consumers while eliminating the need for ad hoc bailouts when banks become insolvent. According to Obama, the reform will contain four central elements: the Volcker Rule to limit the size of banks and the risks allowable, transparency to expose the underlying risk in complex financial instruments, consumer protections to combat predatory lending, and increases in shareholder power to give investors input on executive salaries and bonuses. Obama argued that new financial reforms are vital to the future of the US economy:

In the end, our system only works - our markets are only free - when there are basic safeguards that prevent abuse, that check excesses, that ensure that it is more profitable to play by the rules than to game the system. And that is what the reforms we've been proposing are designed to achieve - no more, no less.