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.The Treasury Department is soliciting comments to assist in this review.The TreasuryDepartment would be particularly interested in comments on the specific questions set forthbelow, or on other issues related to the regulatory structure associated with financial institutions.We are also interested in specific ideas or recommendations as to how we can improve ourcurrent regulatory structure.I.GENERAL ISSUES1.1.What are the key problems or issues that need to be addressed by our review ofthe current regulatory structure for financial institutions?1.2.Over time, there has been an increasing convergence of products across thetraditional  functional regulatory lines of banking, insurance, securities, and futures.What do you view as the significant market developments over the past two decades (e.g.securitization, institutionalization, financial product innovation and globalization) and pleasedescribe what opportunities and/or pressures, if any, these developments have created in theregulation of financial institutions?1.2.1.Does the  functional regulatory framework under which banking,securities, insurance, and futures are primarily regulated by respective functional regulatorslead to inefficiencies in the provision of financial services?1.2.2.Does the  functional regulatory framework pose difficulties forconsidering overall risk to the financial system? If so, to what extent have these difficultiesbeen resolved through regulatory oversight at the holding company level? 1.2.3 Manycountries have moved towards creating a single financial market regulator (e.g., UnitedKingdom s Financial Services Authority; Japan s Financial Services Agency; and Germany sFederal Financial Supervisory Authority (BaFin)).Some countries (e.g., Australia and theNetherlands) have adopted a twin peaks model of regulation, separating prudential safetyand soundness regulation and conduct-of-business regulation.What are the strengths andweaknesses of these structural approaches and their applicability in the United States? Whatideas can be gleaned from these structures that would improve U.S.capitalmarket competitiveness?1.3.What should be the key objectives of financial institution regulation? How couldthe framework for the regulation of financial institutions be more closely aligned with theAppendix 155objectives of regulation? Can our current regulatory framework be improved, especially interms of imparting greater market discipline and providing a more cohesive look atoverall financial system risk? If so, how can it be improved to achieve these goals? Inregards to this set of questions, more specifically:1.3.1.How should the regulation of financial institutions with explicitgovernment guarantees differ from financial institutions without explicit guarantees? Is thecurrent system adequate in this regard?1.3.2.Is there a need for some type of market stability regulation for financialinstitutions without explicit Federal Government guarantees? If so, what would such regulationentail?1.3.3.Does the current system of regulating certain financial institutions at the holdingcompany level allow for sufficient amounts of market discipline? Are there ways toimprove holding company regulation to allow for enhanced market discipline?1.3.4.In recent years, debate has emerged about  more efficient regulation and thepossibility of adopting a  principles-based approach to regulation, rather than a  rules-basedapproach.Others suggest that a proper balance between the two is essential.What are thestrengths, weaknesses and feasibility of such approaches, and could a more  principles-basedapproach improve U.S.competitiveness?1.3.5.Would the U.S.financial regulatory structure benefit if there was auniform set of basic principles of regulation that were agreed upon and adopted by eachfinancial services regulator?1.4.Does the current regulatory structure adequately address consumer or investorprotection issues? If not, how could we improve our current regulatory structure toaddress these issues?1.5.What role should the States have in the regulation of financial institutions? Isthere a difference in the appropriate role of the States depending on financial systemprotection or consumer and investor protection aspects of regulation?1.6.Europe is putting in place a more integrated single financial market under itsFinancial Services Action Plan.Many Asian countries as well are developing theirfinancial markets.Often, these countries or regions are doing so on the basis of widelyadopted international regulatory standards.Global businesses often cite concerns about thecosts associated with meeting diverse regulatory standards in the numerous countries inwhich they operate.To address these issues, some call for greater global regulatoryconvergence and others call for mutual recognition.To what extent should the design ofregulatory initiatives in the United States be informed by the competitiveness of U.S.institutions and markets in the global marketplace? Would the U.S.economy and capitalmarket competitiveness be better served by pursuing greater global regulatoryconvergence?II.SPECIFIC ISSUES2.1.Depository Institutions2.1.1.Are multiple charters for insured depository institutions the optimal way to achieveregulatory objectives? What are the strengths and weaknesses of having charters tied to156 Martin T.Bannister (Editor)specific activities or organizational structures? Are these distinctions as valid and importanttoday as when these charters were granted?2.1.2.What are the strengths and weaknesses of the dual banking system?2.1.3.What is the optimal role for a deposit insurer in depository institutionregulation and supervision? For example, should the insurer be the primary regulator for allinsured depository institutions, should it have back-up regulatory authority, or should itsfunctions be limited to the pricing of deposit insurance, or other functions?2.1.4 What role should the central bank have in bank regulation andsupervision? Is central bank regulatory authority necessary for the development of monetarypolicy?2.1.5.Is the current framework for regulating bank or financial holdingcompanies with depository institution subsidiaries appropriate? Are there other regulatoryframeworks that could or should be considered to limit the transfer of the safety netassociated with insured depository institutions?2.1.6.What are the key consumer protection elements associated with productsoffered by depository institutions? What is the best regulatory enforcementmechanism for these elements?2.2.Insurance2.2.1.What are the costs and benefits of State-based regulation of the insuranceindustry?2.2.2.What are the key Federal interests for establishing a presence or greaterinvolvement in insurance regulation? What regulatory structure would best achieve thesegoals/interests?2.2.3.Should the States continue to have a role (or the sole role) in insuranceregulation? Insurance regulation is already somewhat bifurcated between retail andwholesale companies (e.g., surplus lines carriers).Does the current structure work? Howcould that structure be improved?2.2.4.States have taken an active role in some aspects of the insurancemarketplace (e.g., workers compensation and residual markets for hard to place risks)for various policy reasons [ Pobierz całość w formacie PDF ]