new york (Bloomberg) — President Barack Obama called on the financial industry to drop its "furious efforts" to fight his regulation plan, saying a failure to impose tougher rules on the market will put the US economic system at risk.

The US was almost dragged into a second Great Depression by "a failure of responsibility — from Wall Street to Washington," Obama said yesterday in the text of a speech he's delivering at Cooper Union in New York, about two miles from Wall Street.

"Some on Wall Street forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, pay for an education, open a business, or save for retirement," Obama told an audience of about 700 people, including financial industry executives, local officials, consumer advocates, faculty and students. "What happens here has real consequences across our country."

Obama repeated the arguments he's been making for overhauling financial industry regulations over the past two years, a drive that is nearing its final stages. His push to get the legislation through Congress got a boost when Democrats and Republicans resumed negotiations after weeks of trading accusations. The effort was also helped by the administration's ramped-up lobbying campaign and the announcement last week by the Securities and Exchange Commission that it is suing Goldman Sachs Group Inc. for alleged fraud linked to derivatives.

Obama said financial firms as well as taxpayers will benefit by the imposition of new standards to prevent "reckless risk-taking," the creation of a mechanism to unwind institutions whose failure threatens the financial system, and a more transparent market for trading derivatives.

He criticised the "battalions of financial industry lobbyists descending on Capitol Hill" to influence the legislation. Obama also sought to directly rebut charges by congressional Republicans that the legislation would guarantee future government bailouts of failing firms.

"There is a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process," he said. "But what is not legitimate is to suggest that we're enabling or encouraging future taxpayer bailouts, as some have claimed. That may make for a good sound bite, but it's not factually accurate."

At issue is legislation sponsored by Senate Banking Committee Chairman Christopher Dodd, which may come to the Senate floor as early as next week.

It would set up an independent regulator within the Federal Reserve to guard consumers against abuse and deception in such instruments as mortgages, credit cards or loans. It would also create the mechanism to dismantle systemically important financial firms when they fail, and strengthen oversight of derivatives and hedge funds.

The House has already passed its version of the regulatory-overhaul legislation, and the House and Senate would have to merge their bills.

To give the address, Obama returned to the site where, during the 2008 presidential campaign, he outlined his proposals for a new regulatory regime.

"I take no satisfaction in noting that my comments have largely been borne out by the events that followed," he said.