Fed needs more 'last resort' powers

Speaking in Washington yesterday, Paulson expressed the need to update the emergency authorities of the Federal Reserve, Treasury and other financial regulators, to reflect the current financial system. His remarks come just a day after UK Chancellor Alistair Darling outlined plans for a new banking bill, giving additional powers to the FSA and Bank of England. Paulson says much of the Fed's current authority as lender of last resort was granted during the Great Depression. “Our regulatory system needs an overhaul,” he says. “The Fed has neither the clear statutory authority nor the m...