Federal Reserve Chairman Ben Bernanke told lawmakers the Fed is putting together a number of measures to limit the risk of another bank threatening the U.S. financial system.
USA-BERNANKE - Federal Reserve Chairman Ben Bernanke and several other top U.S. regulators were on Capitol HIll, updating lawmakers on reforms being made in wake of the recent financial crisis.
Bernanke says the Fed is working to meet deadlines required in the Dodd-Frank Act, the name give to last year's landmark overhaul of the financial system.FEDERAL RESERVE CHAIRMAN BEN BERNANKE SAYING:
"A major thrust of the Dodd-Frank Act is addressing the too-big-to-fail problem and mitigating the threat to financial stability posed by systemically important financial firms. As required by the act, the Federal Reserve is developing more stringent prudential standards for large banking organizations and non-bank financial firms designated by the FSOC."
Bernanke goes on to say: the recommendations by the FSOC, or Financial Stability Oversight Council, include annual stress tests and the adoption of so-called living wills, basically a blueprint to unwind a troubled financial institution in the event of another crisis.
FEDERAL RESERVE CHAIRMAN BEN BERNANKE SAYING:
"To meet the January 2012 implementation deadline for these enhanced standards, we anticipate putting out a package of proposed rules for comment this summer. Our goal is to produce a well integrated set of rules that meaningfully reduces the probability of failure of our largest most complex financial firms and that minimizes the losses to the financial system and the economy if such a firm should fail."
The Fed is also working with international regulators to close loopholes that could allow multi-national firms to put the global financial system at risk.
Conway Gittens, Reuters