Former Fed Chairman Volcker calls for overhaul of financial oversight system

MarketsAssociated Press

Former Federal Reserve Chairman Paul Volcker is calling for a reshaping of the U.S. financial oversight regime, which he says is splintered and ineffective.

A public policy group led by Volcker has issued a report on regulation of banks and Wall Street. It says the array of government agencies that oversee the financial system has changed little since the Depression-era 1930s and can't keep up with a fast-moving industry. It calls for a simpler setup.

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Under the Volcker Alliance's recommendations, the Federal Reserve would keep primary responsibility for financial stability. A new Prudential Supervisory Authority, an independent agency, would assume the oversight functions now exercised by the Fed and several other agencies.

Volcker served as Fed chairman from 1979 to 1987 and advised President Barack Obama during the financial crisis.