By Kasra Kangarloo
WASHINGTON (MNI) – Richmond Federal Reserve President Jeffery
Lacker Wednesday said that the financial regulation contained within
Dodd-Fank still leaves too much discretion to regulators with regards to
the circumstances under which a firm should be liquidated.
In a testimony before the House Financial Services Subcommittee on
Oversight and Regulation, Lacker said the bill “could have gone
further,” stating that the current level of discretion will create
difficulties for regulators in future crises.
“There is still a residual amount of discretion going forward that
will make life hard for us,” Lacker said.
Lacker also expressed concern that the bill could lead to “credit
distortions” that could have implications for the broader economy.
CFTC commissioner Jill Sommers, who testified alongside Lacker,
echoed these concerns, citing the potential for the costs to the
financial sector to pass through to markets.
“Market participants say that increased compliance costs could be
passed on to customers,” Sommers said.
** Market News International Washington Bureau: 202-371-2121 **
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