Former Fed official cautions against speedy passage of Wall Street reform

Former Federal Reserve economist Robert Bliss cautioned lawmakers on Friday against moving too fast to complete work on the Wall Street reform bill, saying a rush could produce unintended consequences down the road.

"Some of the changes are positive, but others could create bigger problems than the one they are trying to solve," he said about the bill in prepared remarks.

A House-Senate conference is hoping to complete work on the bill by the July 4 recess. Bliss argues that that goal does not give lawmakers enough time to get additional public feedback on issues like how regulating the over-the-counter derivatives market, expanding audits of the Federal Reserve Board and creating a new consumer protection agency will affect the worldwide market.

"The legislation and these proposals are entirely domestic, and the financial system is entirely international," he said.

Bliss said that while the 2008 financial crisis started in the U.S., it affected Europe because that continent's banks were buying U.S. subprime mortgages.

Now, with Europe facing its own crisis, Bliss believes lawmakers need to determine how that meltdown could affect the U.S. before they pass the reform bill.

"[There's] a major financial crisis brewing in Europe, and that's going to feed back in the U.S. financial markets and our economy," he said. "In today's global markets, we can't have our heads in the sand about the reform's international implications."