FDIC Chairwoman Sheila Bair urged lawmakers to give her agency the power to regulate more troubled financial institutions as a way to cause less damage to the overall financial system.

"We need a new resolution regime for these large institutions, which does a better job of imposing loss on investors and creditors, instead of leaving it in the hands of government and the laps of the taxpayer. To be sure, creating such a resolution mechanism would be very bold. But recent history-I believe-has shown that it is a very necessary step," she said in a speech Economic Club of New York yesterday. "For 75 years the FDIC has quickly and effectively resolved failed banks. We are good at this. We have had a lot of practice over the years.

The subject of creating a systemic risk regulator is at the center of the current debate over the restructuring of the financial services system.

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