Systemic supervision: a necessity of financial modernization

The world of financial services has changed rapidly in the past decade. The recent pace of innovation suggests that change could, if anything, accelerate in the coming years. Such an environment poses difficult challenges for financial industry supervisors, especially in addressing threats to the over-all stability of the financial system. Financial supervision in the United States has evolved in recent years to keep pace, but the coming, new environment may require an approach to supervision that more explicitly monitors the health of the financial system as a whole.