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All systemically important financial institutions, not only banks, should be subject to strong and comprehensive supervision on a consolidated, or firm-wide, basis, Fed Chairman Bernanke reaffirmed. “Such institutions should be subject to tougher capital, liquidity, and risk-management requirements than other firms”, he said.
The Federal Reserve should serve as the consolidated supervisor for systemically important non-bank institutions as well, he underlined in a speech held at the Economic Club of Washington.
Bernanke asked the Congress to create a resolution regime, “analogous to the regime currently used by the FDIC for failing banks, that would permit the government to wind down a troubled systemically important firm”.
The Federal Reserve also supports the creation of a systemic oversight council, made up of the principal financial regulators, to identify developments that may pose systemic risks, recommend approaches for dealing with them, and coordinate the responses of its member agencies.