A prominent Goldman Sachs Group
Gerald Corrigan told the U.S. Senate Banking Committee he backs creating a systemic regulator to monitor the economic big picture, as well as raising capital and liquidity standards for banks. Both proposals have wide political support.
He said in prepared remarks to the panel that the government needs a way to dismantle large, troubled financial firms in an orderly fashion, another idea that looks likely to be approved by Congress early this year as part of a broad overhaul bill.
Corrigan, a former president of the Federal Reserve Bank of New York and now a managing director at politically well-connected Goldman, also said more global cooperation is needed on accounting, bank supervision and economic policies.
He stressed the importance of mark-to-market accounting, or pricing assets at market value, and said tightening the Fed's emergency lending authority would reduce the probability of future financial crises.
Corrigan is a member of the Group of Thirty, a non-profit organization of bankers, financial regulators and academics chaired by Paul Volcker, the former Fed chairman who is now a top economic adviser to President Barack Obama.
The banking committee heard from Corrigan and others at the second of two hearings this week on proposals made by Obama last month to limit proprietary trading by banks, remove them from the hedge fund business and limit their growth.
John Reed, a former top executive at Citigroup Inc
Reed also said, There is a good reason to create a Consumer Protection Agency with a clear and separate mandate.
One of the most controversial of the Obama administration's proposals for tighter financial oversight is setting up such an agency to shield Americans from abusive mortgages, credit cards and other products.
(Reporting by Kevin Drawbaugh and Rachelle Younglai; Editing by Padraic Cassidy)