WASHINGTON - House Financial Services Committee Chairman Barney Frank, D-Mass., urged fellow lawmakers last week to authorize either the Federal Reserve or a new federal entity to act as a "financial services risk regulator," that could assess and mitigate undue risks across the financial markets.

The Fed or new entity would have the capacity and power to assess risk across financial markets, regardless of corporate form, and to intervene when appropriate, Frank told those attending a meeting of the Greater Boston Chamber of Commerce, according to a committee release issued Thursday. In exchange for potential access to the discount window for non-depository institutions, the regulator would receive timely market information from market players, inspect institutions, report to Congress on the health of the entire financial sector and act when necessary to limit risky practices or protect the integrity of financial systems, Frank said. The Federal Reserve Board only regulates banks.

Frank reportedly argued that stronger safeguards are needed because new market players and complex financial tools have outpaced regulation.

The lawmaker's proposal follows the Fed's move last week to provide $200 billion in additional liquidity for Wall Street banks after it helped to orchestrate the buyout of Bear, Stearns & Co. by JP Morgan Chase & Co. Market participants noted at the time that the Securities and Exchange Commission, which regulates broker-dealers, seemed to have been left on the sidelines.

Frank also called for reforming the current regulatory structure by eliminating duplication.

In addition, he called for a reassessment of the capital, market, and leverage requirements that apply to market players.

Frank pledged to monitor the auction rate and municipal securities markets, and in particular cities' abilities to issue muni bonds, which he said has been compromised by insurers' risky activities in the mortgage market.

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