To address a financial firms multinational operations, and increased use of derivatives around the world, a systemic risk regulator requires worldwide authority to do so. Such is the gist of comments made by a top-ranked Federal Reserve policymaker today.
Eric Rosengren, president of the
The financial meltdown has led to calls in the United States for a so-called systemic risk regulator to oversee institutions that are big or interconnected enough to pose a risk to the financial system. The Federal Reserve is widely seen as the most likely candidate for this role, reports Reuters.
Rosengren said the role played by a systemic regulator to be able to address firms' global operations and use of financial derivatives is an important one, as these firms global presence and derivatives activity will likely see growth over time.
Rosengren pointed to the bailout of
"I believe a systemic regulator should have the ability to require transactions to be moved to an exchange as the contract becomes standardized and widely used," he said in the Reuters report.