U.S. Treasury Secretary Timothy Geithner said on Tuesday he would soon revamp the country's regulatory system to prevent a repeat of excessive risk-taking that has tipped it into a severe recession.
In the next few weeks we will outline a comprehensive plan of reform that will include systemic risk regulations to ensure that no large and interconnected firm or market can take on so much risk that its failure could destabilize the entire financial system, Geithner said in remarks to U.S. lawmakers.
The plan calls for bolstering consumer and investor protection. And it will streamline our out-of-date regulatory structure so that our regulatory system matches the size, shape and speed of our modern financial system, he said in testimony to a subcommittee of the Senate Appropriations committee.
U.S. officials complain that the country's patchwork of regulators is ill-equipped to oversee the complexities of modern finance. As a result, they are weighing a range of options that include creating a single systemic regulator, possibly housed within the Federal Reserve, a college of regulators and merging some regulators.
None of the options will please everyone, and all face potential pitfalls and challenges to secure a green light.
Together, these changes will help prevent another crisis of the magnitude that we have just lived through, and give the government new tools to better cope with similar problems should they occur in the future, Geithner said.
(Reporting by Alister Bull; Editing by Andrea Ricci)