Atlanta Fed President Calls for "Agile Oversight" of Financial Institutions
Citing some encouraging signs in the economic outlook, Atlanta Fed President and Chief Executive Officer Dennis Lockhart said in a speech on April 16 that now is the time to think about the post–financial crisis financial regulatory architecture.
In his remarks to the Levy Institute of Bard College in New York, Lockhart answered what he described as a fundamental question: "What regulatory environment will both align with the reality of financial markets and adequately address recent failings?"
Securitization still holds benefits
"Going forward, markets and investors will show a new awareness of the potential for complexity, opacity, and risk in securitized instruments," Lockhart said. "This awareness, in and of itself, has and will continue to provide incentives for the creation of simpler and more transparent securitization structures."
Regulatory structure must evolve
After the financial markets crisis has passed, the regulatory environment should be a balanced blend of rules and principles and should preserve a meaningful role for market discipline, he said. Acknowledging the challenges associated with resolving diversified, global financial institutions, Lockhart called for resolution planning as a continuous effort on the part of regulators.
April 29, 2009