Lockhart: Wise Regulation Is the "Holy Grail"
In concluding the Federal Reserve Bank of Atlanta's 2012 Financial Markets Conference, Atlanta Fed President Dennis Lockhart said one of the overarching themes of the event was the importance of paying attention to the details in formulating future regulatory policy.
Avoiding precipitous action important
Lockhart noted that in his view the financial policymaker's "holy grail" is wise regulation. Reaching that ultimate aim requires a delicate balance between two primary concerns. One is the danger of principle-based reforms and regulations that lead to simple rules will likely be interpreted in various ways and applied inconsistently. On the other hand, detailed rules, Lockhart said, will probably lag market reality, add dysfunctional complexity, encourage gaming of the system, and generate unintended consequences.
Not easy, but essential
The conference was titled "The Devil's in the Details." Lockhart called the event "a kind of checking in" on a regulatory reform process that began two years ago. Following the title of the conference, he noted that the presenters and attendees examined details of certain aspects of financial reform.
April 25, 2012