Note: The following are from the remarks Secretary Tim Geithner “The Macroprudential Toolkit: Measurement and Analysis” Conference … you can read the complete text here
We are working to put in place stronger protections for the broader financial markets, the derivatives markets, mortgage markets, repo and securities lending markets, to help protect the economy from the damage caused by financial shocks and to reduce the risk of contagion from weaker institutions to stronger ones.
We now have better tools to resolve large, complex financial institutions, so that when they make mistakes in the future, we can protect the broader economy from the damage they cause when they fail, without putting taxpayers’ money at risk.
We are making the largest financial institutions pay more for the costs of maintaining a more stable financial system.
We now have limits on the size and concentration of banks in our financial system so that businesses and individuals are less vulnerable to the mistakes they may make in the future. These limits are much tougher than exist in any other major economy.
We are changing the structure of compensation in the financial system, by giving shareholders more power, improving disclosure, and limiting the ability of firms to pay their senior executives in a way that insulates them from the losses that can come from taking too much risk.
We are improving the quality of disclosure around the risks banks face, and leading a global effort to improve the design of stress tests.
We are bringing the shadow financial system out of the dark, and extending the reach of constraints on leverage to firms that could threaten the stability of the financial system.
We are working to reduce the degree of moral hazard in the financial system, while strengthening its resilience against financial panics.
We are working to give the financial regulators the greater resources they need to enforce stronger protections for investors and consumers.
We are redesigning consumer protection in the United States, so that we provide better safeguards against predation and fraud and better disclosure so that consumers can make better decisions about how to borrow responsibly.
As a result of these reforms and those still ahead, our financial system is already in much stronger shape than before the crisis. We closed down the weakest parts, and forced the survivors to meet a tough market test of viability.