Speaking at a conference in Jackson Hole, Bernanke called for a "more
ambitious approach to macroprudential regulation" that would better
gauge the soundness of the entire financial system rather than simply
the strength of individual firms. "Our financial system has become less
bank-centered" and activities or risk-taking not permitted to banks can
more easily migrate to other financial firms or markets, he said.
Under a Treasury Department plan unveiled in March, Bernanke's Fed
would gain more authority to oversee capital markets. Elaborating on
how that might play out, Bernanke Friday called for increased
coordination among the financial exchanges' private- and public-sector
supervisors to better keep current with complex financial instruments
and other "evolving practices and products."
To keep an eye on the broad financial system, Bernanke suggested that
regulators conduct simultaneous stress tests across a range of firms
and markets.
"Doing so might reveal important interactions that are missed by stress tests at the level of the individual firm," he said.
He envisioned a test measuring whether a sharp change in asset prices
would not only affect the value of a particular firm's holdings but
also impair liquidity across markets.
But Bernanke conceded that the costs of conducting truly comprehensive
macroprudential surveillance "could be daunting indeed" because of the
speed at which markets move, the daily shifts in firms' holdings and
exposures and the global nature of today's financial transactions. - Bill McConnell
See the complete text of Bernanke's speech
Maybe he's moved by the Wyoming scenery, but Ben Bernanke is thinking
about switching from portraits to landscapes. The Federal Reserve Board
chairman on Friday painted a picture of where he thinks financial
regulation should go. 
