The Federal Reserve and Federal Deposit Insurance Corporation want to create systemic regulator in the United States and overhaul the financial system to prevent and limit impacts from financial crises, according to officials from both bodies.
"It seems equally clear that each financial regulator must be involved in a successful overall strategy for containing systemic risk," said Fed Governor Daniel Tarullo in his opening remarks to the Senate Banking Committee on Thursday.
He nevertheless declined to take a stance on whether or not the Federal Reserve should assume the responsibility, citing advantages and disadvantages to the move.
Meanwhile, FDIC Chairperson Sheila Bair is asking for "legal measures" to deal with the failure of systemic institutions.
Both policy-makers also called for better consumer protections against financial instruments and better oversight of the standard payments and settlements mechanisms in the United States.
By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009