Volcker calls for U.S. financial regulation shakeup

The U.S. financial regulatory system is outdated and riddled with loopholes, former Federal Reserve Chairman Paul Volcker said on Monday as he offered an overhaul plan to make watchdogs more effective. The rise of the shadow banking sector - companies that provide credit but are not regulated as banks - demonstrates the urgency of regulatory reform, which failed to take root after the 2007-09 financial crisis, he said. "The underlying problem is the growth of the non-bank part of the system," Volcker told Reuters. The oversight of banks should be concentrated in one agency, the Prudential Supervisory Authority, rather than in the three bodies that presently share the task, Volcker said.

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