Later Speech.pdf

John Shad discusses the concept and applications of functional regulation, which originated from the Glass-Steagall amendments proposed by the Treasury in 1982 and Vice President Bush's Task Group on the Regulation of Financial Services. The current regulatory structures of financial service industries, created over half a century ago, are based on industry classifications, resulting in regulatory overlaps, duplications, and conflicts. Shad proposes regulation by functional activities instead of industry classifications, consolidation of overlapping regulatory activities, and elimination of excessive regulations. A task force was formed, and its recommendations include reforms of bank and thrift regulatory structures, consolidating securities registration and reporting requirements within the SEC, and simplifying investment company acts. Some recommendations have been implemented, while others are pending before Congress.