Sen. Schumer urges new financial regulation: report
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Fri, 28 Mar 2008 07:53:02 GMT |
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NEW YORK (Reuters) - Sen. Charles Schumer on Friday called for a rethinking of the U.S. financial regulatory system, perhaps moving toward a single regulator, following the collapse this month of Bear Stearns Cos .In an opinion published in the Wall Street Journal, the New York Democrat and Senate Banking Committee member said the creation of a global financial market and slew of new financial instruments had left commercial banks, investment banks, broker-dealers, traders, insurers, hedge funds and private equity firms increasingly linked to each other's fate.The regulatory scheme had not kept pace with these developments, he said, with commercial banks highly regulated, but investment banks and hedge funds, for example, subject to less stringent regulation despite overlapping business in some areas.Schumer suggested the United States look closely at the U.K. model, where he said a single, strong financial regulator focuses on results and not rules, and might have called on Bear to shore up capital before liquidity fell short.Other goals include focusing on controlling systemic risk and ensuring stability, regulating currently unregulated parts of the financial market and complex financial instruments, recognizing that a global financial world requires global solutions, improving transparency, and ending what he called the Bush administration's "hostility" to regulation.Schumer pledged to work with Sen. Christopher Dodd, the Connecticut Democrat who chairs the banking committee, to start the process.Bear agreed this week to a revised takeover by JPMorgan Chase & Co , which increased its offer for the investment bank from $2 to $10 per share, still more than 90 percent below where it had traded for much of the previous year.(Reporting by Jonathan Stempel, editing by Will Waterman)
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