Listening to Leaders:Hank Paulson

Hank Paulson,the U.S. Treasury Secretary and a former Goldman Sachs(GS) executive,has been focusing on proposed new financial regulations.He would not implement them until the markets stabilize.The highest priority is limiting the impact of current disruptions.The current system creates interagency conflict.Even with new rules,market stress will inevitably occur.The new structure would be phased in over a 2-8 year period.Consumer protection would be improved under the new system.A new insurance regulator would be housed in the Treasury.Mr.Paulson is confident in the resiliency and strength of the capital markets.He is not looking to outlaw innovation.We have excess complexity in many areas.There would be a prudent financial regulator for banks.They would look for issues and problems such as excess complexity.The Federal Reserve would have the authority to examine financial companies,and could require limiting exposure to certain asset classes.