"But the old ways that led to this crisis cannot stand. And to the extent that some have so readily returned to them underscores the need for change and change now," he said. "History cannot be allowed to repeat itself."
Obama was met with a polite but cool reception by several dozen Wall Street executives gathered for the speech. They applauded only once during his comments - and tepidly at that - when he spoke of the need to create a consumer financial protection agency, which the industry is fighting vigorously.
No chief executives of major Wall Street firms attended. A few executives who were there fiddled with BlackBerrys during the address.
Some attendees appeared to fidget uncomfortably when Obama addressed the high compensation that has returned to some corners of Wall Street.
"Pay is a very sensitive issue," Don Marron, head of private-equity firm Lightyear Capital and former chief of Paine Webber, said after the speech. "Obviously, there have been excesses.
"On the other side, great talent needs to be paid well because if it's not paid well it'll leave the banks and go to the hedge funds and private equity funds," Marron said. "The challenge is to try to do it without regulation that limits the ability, particularly of the big firms, to get the talent they need to make the best use of all the money the government's given them."
Obama touted recent signs that the recession might be ending, saying his administration built on the "difficult but necessary" emergency actions of the Bush administration and Congress last fall to help turn around the crisis.
And he noted that after sending billions of taxpayer dollars into the financial system, "we are finally beginning to see money flowing back to the taxpayers" in the form of $70 billion in bailout money repaid by several large banks, at a 17 percent profit to the government.
"While there continues to be a need for government involvement to stabilize the financial system, that necessity is waning," Obama said.
But in sharply worded comments, the president said all that work would be wasted if Congress does not pass his overhaul of financial regulations.
"One year ago, we saw in stark relief how markets can err; how a lack of common-sense rules can lead to excess and abuse; how close we can come to the brink," he said.
