Bernanke Outlines the Future of Financial Regulation

Highlights from Fed chairman’s remarks to the Federal Reserve Bank of Chicago’s conference on bank structure and competition.

Ben S. Bernanke, the Federal Reserve chairman,  spoke today (via satellite) at the Federal Reserve Bank of Chicago’s 2009 Financial Structure Conference.

He primarily talked about the need for more than just supervisory “spot checks” — the need for private sector institutions, and the agencies that supervise them, to look at institutions as a whole, not just the individual branches of a given company; how companies interconnect with one another; the incentive structures for compensation; how companies would fare under various market conditions; and what the “possible unintended consequences” of “innovative” financial instruments (presumably things like credit-default swaps).

 

By Catherine Rampell
NYT
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