systemic risk

We are in a cycle of ever larger risk-taking, punctuated by ever larger failures and ever larger bailouts. This cycle cannot go on.

We cannot afford it. This crisis strained our government’s borrowing ability. There remains worry of a flight from the dollar, and default through inflation. We will probably escape that fate, but the next, bigger crisis may be beyond even our government’s prodigious resources

The current regulatory system, created largely as a response to the Great Depression of the 1930's, was proven ineffective and outdated at preventing and addressing the current financial crisis.  President Obama has proposed to give the Federal Reserve board new powers, including the power to serve as the systemic risk regulator for large and interconnected financial firms, this hearing discusses that decision as well as the pros and cons of doing so. 

Insurance is a complex and important part of the U.S. financial industry with more than $6.3 trillion in assets under management and $1.23 trillion in annual premiums. Modernizing the overall regulatory treatment of insurance is a must. Protecting against the risks certain sectors of the industry may pose and address the greater sensitivity that some industry segments have to external events is also examined.

Recently, there have been a number of interesting characterizations of efforts to reform executive compensation structures on Wall Street. In the wake of the worst economic crisis since the Great Depression, many financial industry leaders have insisted that CEO compensation is "self correcting." They urge inaction on reform, insisting that shareholder and media scruitny has already moderated pay for leaders of poorly-performing companies.