Financial Stability News

News about financial stability, central banking and theory of money

FSOC meeting today

The Financial Stability Oversight Council held its meeting today. Part of the meeting is open to the public and can be viewed live on the Treasury’s website. The only substantive issue on the agenda was the proposed rule making for designating systemic non-bank financial firms (published today at their website). Not a lot of discussion, but still cool to see the council in action. Geithner, leading the meeting looked way more relaxed than during the AIG hearings on the Hill last year. Bernanke to his right and acting chairman of the FDIC on his left. Geithner noted that this proposal was one of the more important parts of the Dodd-Frank legislation, as it extend regulation to institutions that provide bank-like services and pose a systemic risk to the financial system. Staff presented the proposal, that will be a three stage process: First, quantitative indicators based on public data, then second, further analysis based on private supervisory data, and finally discussion with the individual firms before designation is determined. SEC chairwoman Schapiro noted that the thresholds values could be modified based on comments, and then thanked staff for well done job. Gruenberg from FDIC noted that designated firms will also come under the resolution planning requirement, which in his mind was important as well (not the least since they will then fall in their lap). The group then endorsed the July and September minutes which will be posted on the FSOC website soon.


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