Federal Reserve Chairman Kicks Off Year of Change

Kicking off the new year here in Atlanta yesterday, Federal Reserve Chairman Ben Bernanke delivered a speech to the American Economic Association on lessons learned from the financial crisis of 2008.  The focal point of the speech was the role that both monetary and regulatory policy played in the creation of the housing bubble that led to the meltdown.  He admitted that regulatory supervision should serve as the first line of defense in preventing asset bubbles with monetary policy serving as an emergency brake.  Here is his view on the performance of regulatory supervision leading up to the financial crisis.

Even as we continue working to stabilize our financial system and reinvigorate our economy, it is essential that we learn the lessons of the crisis so that we can prevent it from happening again. Because the crisis was so complex, its lessons are many, and they are not always straightforward. Surely, both the private sector and financial regulators must improve their ability to monitor and control risk-taking. The crisis revealed not only weaknesses in regulators' oversight of financial institutions, but also, more fundamentally, important gaps in the architecture of financial regulation around the world. For our part, the Federal Reserve has been working hard to identify problems and to improve and strengthen our supervisory policies and practices, and we have advocated substantial legislative and regulatory reforms to address problems exposed by the crisis.

Based on the view of Chairman Bernanke and many others throughout the world, 2010 will certainly be a year of change as it relates to regulations and risks.  Is your company prepared to address these changes proactively with minimal disruption to business as usual?  Or, will your company be forced to react and change on the fly?  If you are not certain of the answers to these questions, Wheelhouse Advisors can help.  Visit www.WheelhouseAdvisors.com to learn more.