Regulatory failures highlighted in Tarp Panel report

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WASHINGTON, DC - The Congressional Oversight Panel, headed by Harvard University professor Elizabeth Warren, which is overseeing the Troubled Assets Relief Program (Tarp), will release a report today that highlights the regulatory failures leading to the current financial crisis.

The conclusion of the report, as reported by CNBC.com, which received a draft copy of the report, said: "The regulatory system not only failed to manage risk, but also failed to require disclosure of risk through sufficient transparency."

Echoing earlier proposals, the report recommends any future regulation should include better oversight of systemic risk, with one panel member advocating that the Federal Reserve take over the role of systemic regulator. Other recommendations include reducing the potential impact of 'too-big-to-fail' institutions; improved transparency through "better, more accurate credit ratings"; better regulation of consumer products, which would "curb excesses in mortgage lending"; and curbs on executive compensation structures that encourage excessive risk-taking.

Accounting rules, the securitisation of debt, short selling and plans to address the future of US financial architecture are also addressed in the report.

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• Topics
• Troubled Asset Relief Program (Tarp)
• Risk management
• Foreign exchange