U.S. Treasury Secretary Jack Lew praised the work of financial regulators during a Financial Stability Oversight Council hearing, saying that while the nation’s financial system is stronger since the crisis, much work remains.
Lew pointed to efforts by the financial regulators to implement reforms to bolster the financial system, including the Fed’s issuance of new framework for the supervision of financial institutions, the SEC’s continued work on derivatives rules, the CFPB’s new mortgage rules and the FDIC’s implementation of framework that establishes the Orderly Liquidation Authority.
“So we have made important strides over the last year, and our financial system is stronger,” Lew said. “But, as everyone here knows, much work still remains.”
Lew stressed the importance of the FSOC’s analysis of nonbank financial companies, adding that regulators will vote on nonbank designations in coming months.
“A great deal of work remains to attract private capital to our nation’s housing finance system and bolster a housing market showing signs of recovery,” Lew said. “We need to strengthen markets that may be susceptible to destabilizing runs and fire sales. We need to increase our vigilance to operational risks, whether from cyberattacks or from devastating acts of nature like we saw with Superstorm Sandy. And we must work with our foreign counterparts to reform the governance and integrity of financial benchmark reference rates like Libor and to consider transitions toward alternative benchmarks.”