The U.S. should adopt a Systemic Risk Council made up of top financial regulators, according to Investment Company Institute President and CEO Paul Schott Stevens, during testimony July 23 before the U.S. Senate Banking Committee.

"The ongoing financial crisis has highlighted our vulnerability to systemic risks – hazards that arise from new activities, products and structures, and that can spread rapidly and cause significant damage to our financial system," Stevens said. "An interagency council with strong authority in a focused area – in this case, monitoring and directing the response to risks that threaten financial stability – can serve the nation well in addressing complex and multi-faceted risks."

Stevens recommended modeling the new council after the National Security Council, which he led from 1987 to 1989. Members of the council would include the Secretary of the Treasury as well as chairmen of the Federal Reserve, Securities and Exchange Commission, Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Comptroller of the Currency.

Stevens said Congress should give the council "clear authority, but over a limited range of issues – only major unaddressed hazards, not day-to-day regulation."

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