Soros: US Needs Financial Regulator

Soros: US Needs Financial Regulator; Giving Fed Power 'Conflict Of Interest'

NEW YORK -(Dow Jones)- Billionaire investor George Sorosjoined in Capitol Hill's ongoing debate on consumerfinancial reform Wednesday, saying the U.S. needs a financial regulator.

However, Soros cautioned against government rushing into reform that won't work.

"[It's] more important to do it right than right away," said Soros, chair of Soros Fund Management.

He added that giving authority to the Federal Reserve over consumer rights is a "conflict of interest," given the central bank's role in protecting banks.

Soros characterized the back-and-forth in Congress now on financial regulation as "backroom" and "without proper discussion."

"I'm afraid what will come out of it is not going to be adequate," he said, speaking at a panel Wednesday in New York hosted by the Roosevelt Institute.

Soros said economists share the responsibility in the current financial market excesses. Economists have developed hypotheses and theories that led to the creation of "very elaborate synthetic instruments." Soros said these instruments were designed on the "wrong principles," namely, "the belief that markets correct their own excesses and you don't need regulation."

-By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@ dowjones.com