Financial regulators should continue to ensure that financial institutions have sufficient capital and liquidity to reduce threats to economic and financial shocks, the federal umbrella group for the regulators said in its annual report, released Thursday.
In addition, the 2017 report of the Financial Stability Oversight Council (FSOC) recommends that “the U.S. financial regulatory system should promote economic growth not just by preventing financial crises that reduce growth, but also by minimizing those regulations that increase costs without commensurate benefits.”
The annual report of FSOC – which counts as members the federal banking regulatory agencies (the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC)), the National Credit Union Administration (NCUA), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC); the Federal Housing Finance Agency (FHFA), the Treasury Department, and the Consumer Financial Protection Bureau (CFPB) – outlines specific actions to be taken to “ensure financial stability and to mitigate systemic risk that would negatively affect the economy.”
- Support for creation of a private sector council of senior executives to collaborate with regulators and focus on the ways that cyber incidents could impact businesses.
- Monitoring and assessment of the impact of rules on financial institutions and markets.
- Evaluation of whether existing rules and standards for central counterparties and their clearing members are sufficiently robust to mitigate potential threats to financial stability.
- Monitoring and assessment (by the SEC) of the effectiveness of money market mutual fund reforms that were implemented last year.
- Completion of work on alternative reference rates – by both regulators and market participants — and taking appropriate steps to mitigate disruptions associated with the transition to a new reference rate.
- Continuation of work – by both regulators and market participants — to improve the coverage, quality, and accessibility of financial data, as well as data sharing between and among relevant agencies.