WASHINGTON, April 3 (UPI) -- The president of the Federal Reserve Bank of New York called on legislators in Washington to adopt new regulations for financial institutions.
Timothy F. Geithner called for "a forceful policy response," to the near-collapse of investment bank Bear Stearns, which the Federal Reserve Banks helped rescue two weeks ago.
Without new regulations for non-traditional banks and other investment funds, "the consequences would be lower incomes for working families, higher borrowing costs for housing, education and the expenses of everyday life, lower value of retirement savings and rising unemployment," Geithner said.
Geithner made his comments sitting beside Fed Chairman Ben S. Bernanke at a hearing of the Senate Finance Committee, The New York Times reported.
The U.S. Treasury announced a series of proposals for increased transparency and monitoring of financial activities on Monday.
Although under study for months, the proposals were made public after the Fed stepped in to rescue Bear Stearns, stepping outside its normal role of helping regulated banks.
Bernanke spoke briefly Thursday, repeating his assertions that the economy was likely to stall or contract in the coming months.
Then he sounded a hopeful note. "Much necessary economic and financial adjustment has already taken place," he said.
