Even so, the worry is that a systemic regulator would be biased towards intervention, because it would face less criticism for puncturing a non-bubble than for failing to spot a real one.
It had been assumed the same agency would both be systemic risk regulator and wield the new resolution authority.
The systemic risk regulator is empowered to collect data, recommend new regulations and intervene when a company is considered to pose a risk.
Mr Frank said the Fed would almost certainly have some role in whatever is created, but it may be necessary to create the resolution authority first, and endow it on a group of agencies, and decide later who the systemic risk regulator will be.
It also faces a proposal in Congress that could allow America's new systemic-risk regulator to suspend the rules.
But there are many questions over the merits of a systemic-risk regulator.
The FDIC has locked horns with other agencies over who should be the new systemic-risk regulator and who should have authority to wind down failing non-banks.
Many questions exist over the merits of a systemic-risk regulator.
Several countries now expect to introduce a systemic-risk regulator.
It is a big leap, though, from a slowing economy and a crafty regulator to a systemic bad-debt problem.
The insidious double standard remains, with no sign of abating: the Fed, the main source of so many of our current financial woes, is still seen by most as a force for good in the world, as a prescient and astute regulator dedicated to systemic safety and soundness.
FORBES: An Overleveraged Fed Punishes Better-Capitalized Banks
The challenge now is to design a regulator for the finance industry that actually measures and focuses on systemic risks, rather than on the individual parts of the system.
What is called for is a regulator with the scope and the tools to regulate specifically those large systemic institutions.
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