Former Federal Deposit Insurance Corp. chair Sheila Bair is at helm of a new private sector, volunteer group, The Systemic Risk Council.
According to Bair, the new group came together over concerns on "the slow progress of regulators and standard-setters." The council plans to monitor and encourage regulatory reform of U.S. capital markets focused on systemic risk, including the Financial Stability Oversight Council (FSOC) and the Office of Financial Research.
The group was formed by CFA Institute, the global association of investment professionals that sets the standard for professional excellence and The Pew Charitable Trusts, an independent nonprofit organization that brings a rigorous, analytical approach to solving today’s most challenging problems.
It is comprised of a diverse group of experts in investments, capital markets and securities regulation, including senior advisor Paul Volcker, former Chair of the Federal Reserve.
“The great challenge is to devise a system to identify risks that threaten market stability before they become a danger to the general public,” said Bair, who is also a senior advisor to The Pew Charitable Trusts. “As evidenced by the 2008 crisis and even recent headlines, we need a more effective and efficient early-warning system to detect issues that jeopardize the functioning of U.S. financial markets before they disrupt credit flows to the real economy. And two of the most critical tasks are how to impose greater market discipline on excess risk taking and effectively end the doctrine too-big-to-fail.”
The council plans to issue a call to action on June 18, at The Pew Charitable Trusts in Washington, D.C., detailing the objectives and future plans for the Systemic Risk Council.