Former New York Governor Speaks Out On Financial Reform

09.14.09 | FL News Team

(Washington, DC) -- Former Governor Eliot Spitzer, who led a crackdown on Wall Street, says financial reform needs to reach federal regulators as well as big financial institutions.  Spitzer had a tough reputation for going after white-collar crime when he served as New York's top legal officer before he was elected governor.

He told the CBS "Early Show" the Securities and Exchange Commission didn't fail to prevent last year's financial chaos because the agency lacked authority.  Spitzer stated, "the SEC had all the power it needed but chose not to use it."  He also had stern words for what he called an utter failure to act by the Federal Reserve Bank in general and the New York Fed in particular.

Saying the system has not been reformed yet, he noted, "we still have institutions that are too big to fail."  Spitzer claims banks that received billions of taxpayer dollars in federal bailout money "are not investing back into that system to create jobs for the future."

The former governor made his remarks ahead of President Obama's speech today on the anniversary of the collapse of Lehman Brothers.