US and UK asked to overhaul outdated banking regulations

LONDON (AP) - The United States must build a tougher regulatory system that can allow financial institutions to fail without causing wider economic turbulence, U.S. Treasury Secretary Henry Paulson said Wednesday in London.

Both Britain and the United States must overhaul the outdated methods of their financial watchdogs to provide better advance warning of looming troubles in world markets, he said in remarks at a Chatham House think tank event at London's Royal Academy of Arts.