Schumer: Wall Street Needs New Regulation

NEW YORK -- Sen. Charles Schumer, D-N.Y., said Wednesday he believes the credit crisis may get worse and that regulatory failings helped fuel the problems rocking the economy, CNNMoney.com reported.

The chairman of the Joint Economic Committee presided over a hearing exploring the problems in the credit markets and what changes in regulation were necessary to avoid future market disruptions. Witnesses included former Federal Reserve Chairman Paul Volcker and experts from a number of leading think tanks, CNNMoney.com reported.

Volcker suggested that the failures in the credit markets were widespread, ranging from regulation to basic economic problems such as the rising U.S. trade gap, CNNMoney.com reported. He endorsed the idea of the Fed becoming the principal financial regulator, although he cautioned that the central bank "is not equipped to do it now."

He said a greater oversight role for the Fed would require the creation of a new position filled by an official who is held accountable. But he suggested that the needed regulatory changes will not be easy to accomplish, CNNMoney.com reported.

-- NYSSCPA.org News Staff

Posted on 5/14/08