Federal Reserve Chairman Ben Bernanke said on Tuesday regulators must find a way to safeguard the entire financial system and not just its parts to prevent future crises like the one currently engulfing economies around the globe.
Bernanke said the current turmoil was the result of a flood of investment into the United States. Failure by regulators and executives to ensure that capital was carefully used lies behind the crisis, which has tipped economies around the world into recession, he said.
Broadly speaking, the risk-management systems of the private sector and government oversight of the financial sector in the United States and some other industrialized countries failed to ensure that the inrush of capital was prudently invested, he said.
(Reporting by Mark Felsenthal and Kevin Drawbaugh; Editing by Tom Hals)