Treasury’s efforts to address the deficits in our current regulatory system are a step in the right direction. Their recommendations include some short-term proposals to address the problems created by the current credit crunch, as well as a long-term conceptual model with several intermediate steps to reform the regulatory system. Given the current uncertainty in our financial markets, we need to move in a way that does not add further stress. We should work in the short term on implementing surgical regulatory reforms before pursuing broader change. I commend Treasury for coming to such a realization.

After addressing these short-term needs, I am—as I indicated in hearings last fall—very interested in examining how well the regulators created in the last century are responding to the realities of the new century. Our capital markets have significantly evolved. After all, no one had conceived of mortgage-backed securities at the time we created the Federal Reserve and the Securities and Exchange Commission.

This entry was posted on Tuesday, April 1st, 2008 at 11:16 am and is filed under Politics, Economy/Budget .