President Obama's Plan for Overhauling Financial Regulation Expected This Week
Details of "the most sweeping reorganization of financial-market supervision since the 1930s" are expected Wednesday from President Barack Obama, according to The Wall Street Journal, which said it would "touch almost every corner of banking, from how mortgages are underwritten to the way exotic financial instruments are traded."
But even if regulators gain new powers, says U.S. Federal Reserve governor Daniel Tarullo, banks themselves need to be mindful of managing risk, according to The Journal's "Real Time Economics" blog. “As we recover from the crisis and the recession, we will likely be entering a new era in which systemic-risk regulation assumes much greater importance for supervisors,” Tarullo will say in prepared remarks to a banking conference, according to the blog. “But the role of bank management, and of risk management at banks, will also remain what it has always been – to allow these institutions to play an effective intermediating role in a safe and sound fashion."
For more from Knowledge at Wharton on the future of financial regulation, see:
Getting It Right: Making the Most of an Opportunity to Update Market Regulation
Warning: Big Financial Firms May Be Riskier Than They Appear
Dear President-elect Obama: Here's How to Get the Economy out of the Ditch
Economists to Obama: Get the Government out of the Banking Business
A World Transformed: Panelists Look Beyond the Crisis