US sets out long road for reform

The US has long been concerned that its regulatory structure has affected the competitiveness of its financial services firms against more modern regimes such as in the UK. Recently, Treasury Secretary Henry M Paulson set out its Blueprint for Financial Regulatory Reform, proposing integrated regulators for market stability, conduct of business and prudential supervision and the long-awaited optional federal insurance charter

Our current regulatory structure was not built to address the modern financial system with its diversity of market participants, innovation, complexity of financial instruments, convergence of financial intermediaries and trading platforms, global integration and interconnectedness among financial institutions, investors and markets. Moreover, our financial services companies are becoming larger, more complex and more difficult to manage. Much of our current regulatory system was developed after the Great Depression and it has developed through reaction - a pattern of creating regulators as a response to market innovations or to market stress.