JACKSON HOLE, Wyoming (Reuters) - U.S. Federal Reserve Chairman Ben Bernanke's suggestion that financial supervision be revamped to take into account the health of the entire system is a logical response to recent market turmoil, but may be a difficult concept to execute.A year into a financial tsunami unleashed by the spread of bad mortgage debts to credit instruments held around the world, Bernanke last week suggested supervisors broaden their usual firm-by-firm regulatory approach.
"Supervisors often focus on institutions in isolation," he said on Friday at the Kansas City Federal Reserve Bank's annual monetary policy conference here.
"An alternative approach, which has been called systemwide or macroprudential oversight, would broaden the mandate of regulators and supervisors to encompass consideration of potential systemic risks and weaknesses as well," he said.
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