Among the restrictions: limitations to be placed on the size of the country's largest commercial banks, reductions to be imposed on the level of investment risks taken and restrictions to be places on banks' involvement in private equity and hedge funds for their own profit.
In interviews at the White House, Obama observed that the financial system is still operating under the same rules that led to its near collapse. He noted that the need for financial reform is clearly felt in order to overcome the culture of irresponsibility which caused the crisis.
As news of the crackdown broke, Wall Street bank share prices plumetted pushing the S&P 500 financial index down nearly 2 per cent.
Morgan Stanley and Goldman Sachs fell 4 per cent, JP Morgan Chase 6.6 per cent, Barclays 6 per cent and the Royal Bank of Scotland 7 per cent.
America's top shares collectively lost $30bn in value after Obama announced his proposals for banking reforms.