WASHINGTON — Congress should consider streamlining the financial regulatory structure and give the Financial Stability Oversight Council broader authority to respond to systemic risks, according to a Government Accountability Office report published this week.

The report said significant overlap between regulators has led to inconsistent supervision and urged the Federal Reserve Board and the Office of Financial Research to coordinate better in their monitoring for systemic risks.

"While the current structure allows for effective financial regulation in some key areas, recent changes may not have addressed long-standing fragmented and overlapping regulatory authorities and their effects on regulators' oversight activities," the report said, giving a nod to the most recent changes made by the Dodd-Frank Act.

The report said Congress could consider consolidating federal agencies responsible for safety and soundness and combine the oversight of securities and derivatives markets into a single regulator. It also recommended that prudential regulators' remaining consumer protection authorities over large banks be transferred to the Consumer Financial Protection Bureau.

It also warned that the FSOC "may lack the tools needed to comprehensively address systemic risks that may emerge" because it has limited designation authorities when it comes to addressing interconnected activities across multiple entities. The FSOC is forced to make recommendations to address such risks, but cannot compel action even if member agencies are in agreement, the report said.

The GAO also said the Fed and the financial research office could do a better job coordinating.

"This limitation in their collaborative efforts represents lost opportunities for leveraging resources to further their systemic risk monitoring goals and improving their collective ability to identify new and emerging threats to the system," the report said.

The report was requested by five Republican lawmakers, including Sen. Shelley Moore Capito, R-W.Va., and Reps. Sean Duffy, R-Wis., Randy Neugebauer, R-Texas, and Patrick McHenry, R-N.C. It was the culmination of discussion groups with former regulators, industry and advocacy group representatives and industry experts.

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