"We've got a 21st century financial services marketplace and a 19th century regulatory model"
The banking regulators in the United States are fit for the 19th century and need a "dramatic overhaul", according to the man who used to run one of them.
Harvey Pitt was the chairman of the Securities and Exchange Commission (SEC) for two years until 2003.
He oversaw Wall Street when it was rocked by the terrorist attacks on New York in September 2001.
"We've got a 21st century financial services marketplace and a 19th century regulatory model," Mr Pitt says.
The SEC in particular has been heavily criticised after the collapse of several Wall Street banks this year.
'Glitches'
The Republican presidential candidate Senator John McCain has said that, were he president, he would fire the SEC's current chairman Christopher Cox.
Harvey Pitt says Mr Cox is doing a "remarkable job" dealing with "unprecedented" problems. But he insists there must be a "dramatic overhaul" of the regulatory structure.
"I think we need much more capability in the hands of government to act decisively and smoothly when glitches in our markets occur to ensure there's transparency, to ensure our regulators have real risk management capacity to spot trends and problems before they become crises," he told BBC Business Daily.
Mr Pitt now runs his own global business consulting firm, Kalorama Partners, in Washington DC.
The former boss of the SEC says he does not mind if the organisation he used to head is scrapped and its powers transferred to a super-regulator, along the lines of the Financial Services Authority in the UK.
"I think we need either an over-arching regulatory body that combines all of the important functions now, or closer and better co-ordination between them."
Earlier this year, US Treasury Secretary Henry Paulson acknowledged the government needs to change the regulatory system.
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