'More robust' regulation needed for Wall Street firms: Bernanke

0 Comments | AFP, July, 2008

WASHINGTON (AFP) — Federal Reserve chairman Ben Bernanke called Tuesday for legislation to provide "more robust" supervision of Wall Street investment firms to help avert crises like the one that felled Bear Stearns.

Bernanke, speaking to a forum on mortgage lending, said regulatory loopholes helped precipitate the crisis in the US housing sector that spread to banks and investment firms that financed real estate speculation.

"The enormous losses and writedowns taken at financial institutions around the world since August, as well as the run on Bear Stearns, show that, in this episode, neither market discipline nor regulatory oversight succeeded in limiting leverage and risk-taking sufficiently to preserve financial stability," Bernanke said.

The Fed chief...