Legal Commentary

Proposals for regulatory consolidation are not new - our multiple financial regulators can be thought of as chaotic, redundant and burdensome or as an beneficial source of regulatory competition and an experimental laboratory.  But Bernanke's speech to the Council on Foreign Relations today is potentially a bid to emerge as a new macro-regulator, a "systemic risk authority." 

[B]ecause the goal of any systemic risk authority would be to have a broader view of the financial system, simply relying on existing structures likely would be insufficient.  For example, a systemic risk authority would need broad authority to obtain information--through data collection and reports, or when necessary, examinations--from banks and key financial market participants, as well as from nonbank financial institutions that currently may not be subject to regular supervisory reporting requirements. A systemic risk authority likely would also need an appropriately calibrated ability to take measures to address identified systemic risks--in coordination with other supervisors, when possible, or independently, if necessary. The role of a systemic risk authority in setting standards for capital, liquidity, and risk-management practices for the financial sector also would need to be explored ....

Notice echoes of pre-financial-meltdown consolidation proposals in the Treasury's Blueprint for a Modernized Financial Regulatory Structure....