Sep. 15--Bill George, a board member of Wall Street's Goldman Sachs and the celebrated former CEO of Medtronic Inc., saluted President Obama's bid for better regulation of the huge financial players on Monday.

"The financial people are very aggressive. You need referees," said George, who led Medtronic for a decade through 2001 as it emerged as a global medical-device power with a market value of $60 billion.

In the wake of unparalleled federal intervention, investments and guarantees by the Bush and Obama administrations since last year, Obama warned Wall Street's surviving titans: "We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses."

George concurs: "You can regulate the rules of the game. You can't regulate character. And we have to choose leaders who focus on long-term sustainability for all the stakeholders, not just themselves and the stockholders."

Goldman Sachs executives, early in 2007, listened to their mortgage market experts who saw the overbought real estate market moving into dangerous waters, and started selling positions and even placing bets against big players such as Bear Stearns and Lehman Brothers. Goldman has emerged a bigger, profitable financial giant, as have Wells Fargo, U.S. Bancorp and others who absorbed their weaker sisters.

George said that Alan Greenspan's Federal Reserve failed in its job as the ultimate regulator several years ago after sweeping deregulation of the financial system because Greenspan "was too caught up in the belief that people would act in long-term self-interest and would self-regulate. What happened is it became short-term interest. The root cause of this financial crisis is leaders acting in their personal, short-term interest."

Richard Fuld, the longtime head of Lehman, has told reporters that he wouldn't do anything differently. The record shows that Fuld failed to heed warnings from subordinates about the pending mortgage crisis in 2007 and didn't approach regulators until it was too late. Similarly, former Bear Stearns CEO Alan Schwartz could find no fault with himself in the aftermath of his firm's March 2008 collapse and forced sale to J.P. Morgan.

"That's absurd," George said. "Of course, you would do things differently. Some of these leaders were not grounded in their responsibilities. ... We didn't have a failure of subprime mortgages but of subprime leadership.