The five regulatory reform objectives published by the US administration in June 2009 are well intended but would better serve the financial services industry if rewritten to delineate the role of government in the future of the financial system.
Improving "supervision and regulation" should be separate objectives because regulation only provides the rulebook whereas supervision can actively intervene before a crisis goes beyond repair.
Government regulators will be challenged to acquire, pay for, and field the skills, experience, and innovation in technology needed to fulfill a dynamic and constructive supervisory role.
Protecting the interests of "consumers and investors," one objective of the proposed regulatory reforms, should be captured in separate statements because those interests are often different.
Working toward international standards for regulatory oversight will increase bureaucracy and thereby dampen the companion — and more important — goal of international cooperation.
As the government adds to its regulatory "tool kit," there is an opportunity, thus far ignored, to leverage technology in facilitating global transparency for better risk management.
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