The delightfully old-fashioned idea that central banks should take steps to exercise surveillance over financial institutions has, not before time, been resurrected.

In proposals on bank regulation, announced overnight, US President Barack Obama said financial firms big enough to pose a risk to the financial system should be heavily regulated by the Federal Reserve. He said the Fed should "fundamentally adjust" its current supervision to more watch for systemic risks collect reports from all US. financial firms that meet "certain minimum size thresholds."