President Obama: We have 'unfinished business' curbing Wall Street bonuses

President warns bonus-driven culture poses a risk to the stability of the financial system

US President Barack Obama speaks on the economy in Georgetown Waterfront Park on July 1, 2014 in Washington (GETTY IMAGES)

President Barack Obama has warned America has "unfinished business" curbing the excesses of bonus-driven Wall Street.

Speaking on radio service American Public Media, Mr Obama argued that reforms are still needed because risk-taking and big bonuses remain a major incentive for traders.

"If you are in one of the big banks, the profit centre is the trading desk and you can generate a huge amount of bonuses by making some big bets," he added. But, if you "make a bad bet, you might end up leaving the shop, but in the meantime everybody else is left holding the bag".

The president argued recent reforms, such as the Dodd-Frank act, have helped protect taxpayers but taming Wall Street is "going to require us looking at additional steps", without going into further details.

The average Wall Street bonus last year was $164,000 (£95,600) — the highest since the financial crisis of 2008. The total bonus pool rose by 15 per cent $26.7 billion.

Mr Obama added that he had told his economic team at the White House “to continue to see how we can re-balance the economy sensibly, so that we have a banking system that is doing what it is supposed to be doing to grow the real economy”.