Senator Warner spoke on both Bloomberg TV and MSNBC's Morning Joe today about his idea to empower an independent council, rather than giving the additional responsibility to the Federal Reserve, to regulate systemic risk -- "the kind of thing that we couldn't necessarily predict," he said, such as the mess at AIG that played such a major role in the financial industry's near-collapse last fall.  

While the Obama Administration's plan does include a council of sorts, it would give the Fed the sole authority to regulate systemic risk.  Senator Warner told Bloomberg that he doesn't think the Fed is the right place: 

"We ought to not make big regulatory entities so much bigger [plus] I think there's a potential conflict of interest.  I'd rather have that council not be an advisory council the way the administration's put it together, but actually empower that council with an independent chair.  

"The chairman of the Fed does a very good job with monetary policy [but] I think it's a different mindset to be a systemic risk regulator.  I'd rather have an independent chair of that council with an independent staff that could draw-up information from all the various regulatory agencies, and not have any other day-to-day responsbility in terms of monetary policy or prudential regulation... having only one goal [which] is to try to measure and make sure we get ahead of systemic risk."

He added that there should be a look at broader reforms of the eight federal regulatory agencies:

"This ought to be an area, though, that should not break down on partisan lines.  This ought to be an area where we get the best advice as possible and try to make sure we get it right. We've got one bite at the apple.  If we get it wrong, the unintended consequences in terms of the financial markets could be pretty devastating." 

On MSNBC, the Senator explained exactly what systemic risk is and outlined some ideas on how we might prevent the problem of "too big to fail" from happening again:

"We've got to look at the potential for what the next crisis is going to be.  That's why ... you've got this systemic risk council with some broad authority to draw on information across all of these regulatory agencies... and get ahead of this game." 

Senator Warner spoke on the floor of the Senate yesterday to talk about his proposal.  The Wall Street Journal and ABC News covered his statement.