etter regulation is needed to dissuade financial market players from taking excessive risks

Better regulation is needed to dissuade financial market players from taking excessive risks after the “too big to fail problem” undermined discipline, a senior Federal Reserve official said on Tuesday.

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Philadelphia Federal Reserve Bank President Charles Plosser said there were ways to discipline the market — some within the market itself — to prevent excessive risk taking.

His comments followed statements from Federal Reserve Chairman Ben Bernanke, who said over the weekend that regulators should be significantly tougher on large and complex financial firms.

“The too big to fail problem has essentially removed much of that market discipline,” Plosser told an economic conference in Prague.

“We have to have ways of disciplining the actors in the marketplace so that they don’t take excessive risks, and in many cases the market can do that and do that quite effectively. [Read the full article]

The Federal Reserve announced final rules for gift cards Tuesday that the central bank says will help protect consumers from unexpected costs.

The rules, which go into effect in August, limit the fees that issuers are allowed to charge on gift cards, including inactivity, dormancy and other service fees. Issuers will also be required to clearly state the terms and conditions associated with gift cards.

Under the new rules, issuers will only be able to charge fees after a gift card or certificate has not been used for a year, and fees will be limited to one per month after that.

In addition, the Fed said issuers cannot charge fees unless the consumer has been given “clear and conspicuous disclosure” about them.

The rules will also extend expiration dates for gift cards to at least five years after the date of issuance, or five years after the date when funds were last loaded. [Read the full article]

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