Newsletter May 2013: Action needed to deal with regulatory gaps – Tarullo

WASHINGTON – Despite considerable progress with the global financial regulatory overhaul, vulnerabilities remain. In two related areas in particular – the short-term wholesale funding markets and the problem of banks that are “too-big-to-fail” – more needs to be done, Daniel Tarullo, the US Federal Reserve governor responsible for regulation told a Washington audience in early May. “We would do the American public a fundamental disservice,” he said “were we to declare victory without tackling the structural weaknesses of short-term wholesale funding markets, both in general and as they affect the too-big-to-fail problem. This is the major problem that remains, and I would suggest that additional reform measures be evaluated by reference to how effective they could be in solving it.”