Publication: Bloomberg View
Author: Simon Johnson
06/06/2012 —Two years after passage of the Dodd- Frank financial reform law, how are we doing putting in place crucial provisions, including a way to control systemic risk?
Not well, according to Sheila Bair, chairman of the Federal Deposit Insurance Corp. during the 2008-2009 economic disaster and author of some of the reforms in the act.
Bair is still at it. On June 6 she established a private- sector systemic-risk council, an initiative funded by the Pew Charitable Trusts and the Chartered Financial Analysts Institute. (I’m a member of the council, but I am writing here in my personal capacity; we have agreed that only Bair will speak for the council.)
Her point is simple. The Dodd-Frank Act created the all- important Financial Stability Oversight Council (known as FSOC and pronounced F-Sock). It replaced the President’s Working Group on Financial Markets, a panel frequently mentioned in former Treasury Secretary Henry Paulson’s memoir of the financial crisis, “On the Brink.” That working group lacked authority to coordinate the alphabet soup of regulators overseeing the U.S. financial system.
Read the full article, We Need a Watchdog for all the New Watchdogs, on the Bloomberg View website.