NY Fed chief urges global bank framework

[ben_meyers]

NY Fed chief urges global bank framework
By James Politi in Washington and Gillian Tett in London

Published: June 8 2008 23:32 | Last updated: June 8 2008 23:32

Banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework with “appropriate requirements for capital and liquidity”, according to Timothy Geithner, president of the Federal Reserve Bank of New York.

Writing in Monday’s Financial Times, Mr Geithner, a key US policymaker throughout the credit crisis and one of the main architects of the rescue of Bear Stearns, says that the US Federal Reserve should play a “central role” in the new regulatory framework, working closely with supervisors in the US and round the world.

The credit crisis has heightened pressure on US policymakers to consider sweeping changes to a regulatory system for financial institutions which has commercial banks such as JPMorgan Chase and Citigroup regulated by the Fed and investment banks such as Goldman Sachs and Lehman Brothers more loosely regulated by the Securities and Exchange Commission.

http://www.ft.com/cms/s/0/546b1604-3585-11dd-998d-0000779fd2ac.html?nclick_check=1

A return to the Glass-Segal Act, repealed in 1999, would be a good place to start.

Read the Mother Jones opinion piece on what deregulation has done to the financial markets.

It's the Deregulation, Stupid

Commentary: Democrats from Carter to Clinton helped roll back the government's regulatory power, but as the economic crisis deepens, "regulation" is no longer such a dirty word.

By James Ridgeway

March 28, 2008

http://www.motherjones.com/commentary/columns/2008/03/deregulation-economic-crisis.html


http://www.streetsmartreport.com/school/Commentaries/My%202006%20Wish%20for%20the%20U.S.%20Financial%20System.html

[whistle]

1. The worst possible thing that could happen

[PDJane]

2. and deregulation worked so well???

[ben_meyers]

3. Now thats the kind of well thought out, insightful and

documented commentary I was looking for.

[slipslidingaway]

4. K&R n/t

[lurky]

5. I don't see foreign nations giving the U.S. Fed...

a "central role" in regulating their monetary policy -- particularly given our current financial and foreign policy standing. On top of sovereignty issues, there is also the problem of the dubious policies the Fed has pursued, helping to cause the current mess. I'm guessing the central bankers of the world are all laughing their asses off at that idea.

[slipslidingaway]

6. kick n/t

[RB TexLa]

7. Good to know someone is talking about getting this done, about 30 years late to the game but

change takes time.

[slipslidingaway]

8. Fed's Geithner seeks global banking framework...

http://www.iht.com/articles/reuters/2008/06/09/business/OUKBS-UK-FED-GEITHNER.php

"...Geithner envisioned a central role for the Federal Reserve, working with other regulators in the United States and abroad.

"At present the Fed has broad responsibility for financial stability not matched by direct authority," he wrote...

He also said central banks should have a "standing network of currency swaps, collateral policies and account arrangements that would make it easier to mobilise liquidity across borders quickly in a crisis."

..."It is important that we move quickly to adapt the regulatory system to address the vulnerabilities exposed by this financial crisis," Geithner wrote."