However, as you are aware, by the 1990s the pace of consolidation, expansion, and innovation in the U.S. banking industry had begun to accelerate, particularly among the largest institutions. The emergence of large, complex banking organizations and their use of new financial instruments, particularly derivatives, enabled these organizations to change their risk profiles rapidly.
The Dodd-Frank Wall Street Reform and Consumer Protection Act now requires the Federal Reserve to take a macroprudential approach to financial regulation – that is, to consider the health of the financial system as well as the health of individual firms and markets.