U.S. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson Thursday told Congress that regulators should gain greater powers in oversight of financial market.
"Cooperation between the Fed and the SEC (Securities and Exchange Commission) is taking place within the existing statutory framework with the objective of addressing the near-term situation," Bernanke said in the hearing.
"In the longer term, however, legislation may be needed to provide a more robust framework for the prudential supervision of investment banks and other large securities dealers," said the central bank chief.
He warned that any reforms should "unduly inhibit innovation" or result in a shift of certain risky activities to other institutions.
"Any potential commitment of government support should be an extraordinary event that requires the engagement of the Treasury Department and contains sufficient criteria to prevent costs to the taxpayer to the greatest extent possible," he added.
Paulson, in testimony to the same Congress panel, made the similar appeal, saying the Bear Stearns episode and the current market turmoil have "convinced me that we must move much more quickly to update our regulatory structure and improve both market oversight and market discipline."
"We should consider how to most appropriately give the Federal Reserve the authority to access necessary information from complex financial institutions ... and the tools to intervene to mitigate systemic risk in advance of a crisis," he said.
Source:Xinhua
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