Two leading US regulators at odds over how to regulate
US Treasury Secretary Tim Geithner has attacked Federal Deposit Insurance Corporation's Sheila Bair's bail-out Financial Company Resolution Fund proposal, the Telegraph reports.
The attack is part of a continuing battle between US regulators to take the super-regulator.
Bair called on the US Congress to set up a Financial Company Resolution Fund that would be pre-funded by major banks.
Moral hazard
Geithner, the Treasury Secretary says the scheme would create a moral hazard as financial markets would expect companies to be guaranteed a bail-out.
“We don’t want to create that expectation, that’s why we think it’s better to do it after the fact,” Mr Geithner told the House Financial Services Committee.
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