Oversight, Regulation

U.S. Chamber: Without reform, FSOC will “fall short of mandates”

chamber of commerceThe U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness released on Monday suggested reforms to the Financial Stability Oversight Council as part of an effort to simplify the regulatory regime.

The agenda identifies 14 suggested reforms aimed at strengthening evidence-based analysis, modifying the council’s structure to improve operational effectiveness, ensuring due process during the systemic risk designation process and to address unfilled responsibilities to promote efficiency.

“We fully appreciate the importance of identifying and limiting systemic risk, but FSOC’s current structure and processes have missed the mark,” CCMC President and CEO David Hirschmann said. “In the over three years since FSOC’s creation, we believe several fundamental shortcomings in the FSOC’s structure and operations have been exposed. Although tasked with over a dozen assignments, systemic risk designation has dominated the agenda to the detriment of the overall system. The reforms we propose will help ensure better regulatory outcomes that both enhance financial stability and ensure our nation’s economy and job creators benefit from efficient, robust, transparent and well-regulated capital markets.”

The FSOC was created under the 2010 Dodd-Frank Act to monitor and address threats to U.S. financial stability and conflicts within the regulatory system.

“Even before the 2008 crisis, the Chamber was calling for financial regulatory reform,” Hirschmann said. “Congress intended FSOC to streamline the financial regulatory regime, identify systemic risks and improve regulatory coordination.  This was designed as an alternative to calls to fundamentally re-structure the system. Without necessary reforms, FSOC will fall short of its mandates, leaving both the regulatory and financial system vulnerable.”

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