Durable Financial Regulation: Monitoring Financial Instruments as a Counterpart to Regulating Financial Institutions

Supersedes Working Paper 10-22 - Durable Financial Regulation: Monitoring Financial Instruments as a Counterpart to Regulating Financial Institutions

It specifically describes a potential large macro-micro database for the U.S. based on an extended version of the Flow of Funds. The author argues that such a database would have been of material value to U.S. regulators in ameliorating the recent financial crisis and could be of aid in understanding the potential vulnerabilities of an innovative financial system in the future. The author also suggests that making these data available to the academic research community, under strict confidentiality restrictions, would enhance the detection and measurement of systemic risk.