WASHINGTON–(BUSINESS WIRE)–The Systemic Risk Council urges the U.S. Treasury and other members of
the Financial Stability Oversight Council (FSOC) to abandon their 6
March proposal to marginalize their power to designate individual
non-bank financial firms as systemically significant.
The proposed guidance, while framed in terms of setting preconditions
for when the FSOC would exercise its designation power, would in
practice almost certainly deprive the FSOC of the capacity to designate
a non-bank firm as systemically significant in time to head off the
risks posed by that firm to financial stability.
Commenting on the Treasury’s proposal, SRC Chair Paul Tucker said:
“If FSOC really intends activities to be center stage, it should get on
with putting in place a general policy to protect the economy from
threats to stability from shadow banking. But nor should FSOC flinch
from designating any individual intermediaries whose disorderly failure
would be systemic. It is too early to put aside one of the most obvious
lessons of 2008/09.”
The SRC already expressed its concern with the FSOC’s proposed approach
in a comment letter submitted to the Treasury last year.
For further information contact David Evanson at [email protected]
or 215.460.8139 or Bristol Voss at [email protected]
or 212.705.1738.
About The Systemic Risk Council
The Systemic Risk Council (SRC or Council) is a private sector,
non-partisan body of former government officials and financial and legal
experts committed to addressing regulatory and structural issues
relating to global systemic risk, with a particular focus on the United
States and Europe. It has been formed to provide a strong, independent
voice for reforms that are necessary to protect the public from
financial instability. The goal is to help ensure a financial system in
which we can all have confidence.
The SRC was formed by CFA
Institute and The
Pew Charitable Trusts in June 2012 to monitor and encourage
regulatory reform of U.S. capital markets focused on systemic risk. CFA
Institute became the sole supporting organization in August 2015. The
statements, documents and recommendations of the Council does not
necessarily represent the views of the supporting organization.
Contacts
David Evanson
[email protected]
215.460.8139
Bristol Voss
[email protected]
212.705.1738
