Federal Reserve Chairman Ben Bernanke said Thursday that the government must avoid imposing “burdensome rules” on financial companies as it carries out the biggest regulatory overhaul in seven decades.
“No one’s interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit,” Bernanke said in a speech to the Chicago Fed’s annual banking conference.
“Regulators must aim to avoid stifling reasonable risk-taking and innovation in financial markets, as these factors play an important role in fostering broader productivity gains, economic growth and job creation,” he said.
Bernanke and Fed officials are trying to balance the need to reduce the risk of repeating the 2007-08 financial crisis with the aim of reviving the economy after the worst recession since the Great Depression. The central bank, under last year’s Dodd-Frank Act, was given the job of overseeing the biggest financial companies.
Bernanke has backed a so-called macroprudential approach to supervision that looks at patterns and risks across different companies and markets and not just at how individual firms are performing. The Fed chief didn’t discuss the outlook for the economy or monetary policy.
