Steve Bartlett, president and CEO of The Financial Services Roundtable (New York), proposes five "no regret" moves to reform the financial regulatory system.
The announcement came at a conference of the Institute of International Bankers in New York during a session called "Private Sector Views on Regulatory Responses to the Financial Crisis and International Competitiveness." Bartlett proposed a series of regulatory reforms "aimed at the lack of common goals and coordination in our current regulatory system." Specifically, Bartlett called for:
Market Stabilization " Reduce the potential for systemic risk by giving the Board overarching supervisory authority over systemically significant financial services firms that seek access to the discount window or other financial facilities. Interagency Coordination " Provide for greater cooperation and coordination among all financial regulators by expanding the membership and mission of the PWG to make it more forward looking. Principles-Based Regulation " Enable financial regulators to adapt and respond more effectively to changes in markets through the enactment of a set of principles that serve as a common point of reference for both financial regulators and financial services firms. Such principles will guide the review and development of more detailed rules that necessarily follow. Prudential Supervision " Encourage the early identification of potential financial risks by requiring the application of prudential supervision by all financial regulators to all financial services firms. Federal Insurance Supervision " Strengthen the oversight of insurance markets and potential insurance risks by authorizing optional Federal chartering and supervision of firms engaged in the business of insurance.
"We would not be so bold as to suggest that the implementation of these recommendations would have prevented the current crisis entirely. However, we do believe they would have helped regulators and the financial services industry better appreciate market developments and would have diminished the scope and severity of the crisis," he told attendees.