Expanded risk management disclosures by financial institutions is a significant step in this direction.” Alan Greenspan, May 1997.1  •  “For major banks in industrial countries ..... there needs to be a shift of emphasis towards the re-inforcement of internal managerial risk-control mechanisms, and a recasting of the nature and functions of external regulation, away from generalised rule-setting and towards establishing incentives/sanctions which reinforce such internal control mechanisms.” Charles Goodhart, June 1997.2  •  “Much recent thinking has focused on incentive-compatible regulation -- using the market’s own internal forces -- as the promising next step for strengthening the financial system.
It is  1 Remarks by the Chairman of the Board of Governors of the US Federal Reserve System, Mr Alan Greenspan, at the Conference on Bank Structure and Competition of the Federal Reserve Bank of Chicago on 1 May 1997. 2 From “Financial Regulation: Why, How and Where Now?” Charles A.E. Goodhart et al, 6 June 1997.