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If President Obama asked for the most urgent financial reform, global or domestic, needed to rebuild the credibility of the financial system, what would be the answer?

The "Restoring American Financial Stability Act" (The Dodd bill) that will be debated in the Senate attempts to limit the ability of the government or government agencies to protect stakeholders at failed large complex financial institutions from sharing in the losses suffered by the institution.

The Shadow Financial Regulatory Committee believes that the banking industry was short-sighted in encouraging the adoption ofthe provision of the Deficit Reduction Act of 2005 that extended to five years the period during which replenishmentof the depositinsurance fund must occur.

If the government chooses to regulate the capital markets, we will simply be assuring ourselves of many more financial crises in the future.

Howimportant is it that the FDIC has the capability to handle a large bank failure with a prompt payout to depositors or a transfer of funds to a bridge bank?

Clear capital requirements are all we need.

The federal banking agencies and the office of Thrift Supervision recently proulgated a final rule implementing the requirement of Section 305 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).