Financial Regulatory Reform: Systemic Risk and the Federal Reserve

摘要

In the wake of the recent financial crisis, many commentators have proposed creating a systemic risk or 'macroprudential' regulator to help avoid future crises. Some proposals would give this role to the Federal Reserve (Fed), whereas others would house it in a new or existing regulator within the executive branch. The Obama Administration's financial regulatory reform proposal includes many of the elements that are often assigned to a systemic risk regulator, giving many - but not all - of these responsibilities to the Fed. This report defines the potential duties and responsibilities of a systemic risk regulator, relating those duties to events that potentially contributed to the recent crisis. It then identifies the powers that would need to be given to a regulator to perform those duties, and compares those powers and responsibilities to the Fed's existing powers and responsibilities. It discusses advantages and disadvantages of giving those responsibilities to the Fed or the executive branch. It includes a brief overview of major elements of the Administration's proposal, H.R. 4173, which passed the House on December 11, 2009, and The Restoring American Financial Stability Act, which was ordered to be reported out of the Senate Banking Committee on March 22, 2010, that involve the Fed.