Fed's Warsh says more Regulation might Hurt US economySubmitted by bobbyw24 on Thu, 02/04/2010 - 08:45
WASHINGTON, Feb 2 (Reuters) - U.S. Federal Reserve Board Governor Kevin Warsh said on Tuesday that financial reform efforts that focus narrowly on expanding regulation could stifle the economy.
His comments, published in a Financial Times newspaper opinion piece, come as President Barack Obama pushes for tighter rules that would attempt to limit risky behavior by banks.
Warsh described attempts to strengthen the system as "worthwhile," but said time would be better spent reviewing the role of government-sponsored mortgage finance agencies Fannie Mae and Freddie Mac.
Banks, he said, should not be treated like heavily-regulated utilities.
"In a global economy, big is not bad," Warsh wrote."The U.S. economy runs grave risks if we slouch toward a quasi-public utility model."