The regulation of financial services in the U.S. is based on a bank-centric model established for the conditions that existed 90 years ago after the Great Depression. Today’s financial services world is far more diversified with less of it regulated. As a result, we continue to see events that seriously destabilize our financial system.
As the Administration considers the future of financial services regulation, it is time to evaluate how we can create a financial regulatory system that (i) reduces financial stability risks ignored by asymmetrical oversight, (ii) confronts known structural risks created by the digital economy and (iii) deploys and utilizes predictive artificial intelligence to deal with threats before they spiral out of control.