Chairman Bernanke Comments on New Financial Reform Legislation
The U.S. Congress recently passed landmark financial reform legislation, which President Obama signed into law on July 21. Federal Reserve Chairman Ben Bernanke praised the new law, calling it a "welcome and far-reaching step toward preventing a replay of the recent financial crisis."
Among other things, the legislation strengthens consolidated supervision of systemically important financial institutions and gives the government tools to wind down failing financial firms, Bernanke said in a July 15 statement. The new legislation also creates an interagency council to monitor the financial stability of the entire financial system and help deter emerging threats. Further, the financial overhaul legislation "enhances the transparency of the Federal Reserve while preserving the political independence that is crucial to monetary policymaking," he added.
The Federal Reserve has already taken steps to enhance its oversight of the financial system and systemically important financial firms, explained Bernanke, including changes to its supervisory framework, recent actions to strengthen financial market infrastructures and practices, and improved tools to monitor the financial sector and identify potential risks.
Saying that although much work remains, Bernanke noted in his semiannual monetary policy testimony before Congress that "the legislation, together with stronger regulatory standards for bank capital and liquidity now being developed, will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years."
July 29, 2010