13 June 2008

US Congress to hold hearings on financial market regulatory restructuring

The Financial Services Committee will hold hearings on the policy implications of the transformation of domestic and international financial markets starting in July. Potential systemic risks and the adequacy of current oversight are on the agenda.

The Financial Services Committee will hold a series of hearings on the policy implications of the transformation of domestic and international financial markets. The committee will explore the potential systemic risks associated with these developments, the adequacy of current oversight and tools, and the extent to which existing structures are adequate to respond to future problems.

 

Specifically, the hearings will examine:

• The regulatory implications of providing investment banks and others access to the discount window.
• Various proposals including those from the Financial Stability Forum and New York Federal Reserve Bank President Timothy Geithner to improve the oversight and mitigation of systemic risk.
• The need for enhanced capital and reserve requirements for financial firms.
• The current powers of the Federal Reserve and other regulatory agencies to determine whether existing authority is sufficient to protect the financial system and the taxpayers.

 

“We have failed to develop a regulatory system with the reach and capacity to protect the system against the large risks embedded in our increasingly interconnected markets”, said Chairman Frank. “These hearings are designed to focus on identifying how much reach and what new capacities are needed to avoid – or respond to – the next crisis,”

 

Press release

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