Coleman warns of stability dangers from regulatory reform

Operational risk, not market or credit risk, is now seen as the biggest threat to financial stability - and the New York Fed's Stacy Coleman warns that deliberate attack and regulatory change are among the most worrying operational dangers for individual banks and the entire financial system. By Alexander Campbell

As head of operational risk at the New York Federal Reserve Bank, Stacy Coleman spends much of her time concerned about the stability of the US financial system - but, she says, the threats that worry her most have as much to do with September 2001 as September 2008.

Seven years before the growing US subprime mortgage crisis caused the downfall of major investment banks in the largest financial upheaval in 70 years, the September 11 terrorist attacks had dramatically demonstrated the