Mnuchin to provide administration’s view of FSOC 2017 annual report

The Trump administration’s point person on “ensuring the financial security of the United States” will testify before a Senate committee Tuesday about a federal oversight group’s report that calls for minimizing regulations which increase costs for the U.S. financial regulatory system without matching benefits.

Treasury Secretary Steven Mnuchin will appear before the Senate Banking Committee (starting at 10 a.m.) to discuss the Financial Stability Oversight Council’s (FSOC) 2017 annual report to Congress.

The report, issued last month, stated that financial regulators should continue to ensure that financial institutions have sufficient capital and liquidity to reduce threats to economic and financial shocks.

Additionally, the FSOC item recommended 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 Dec. 14 report outlined specific actions to be taken to “ensure financial stability and to mitigate systemic risk that would negatively affect the economy.”

Those include:

  • 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.

Financial Stability Oversight Council Releases Annual Report

Senate Banking Committee hearing: The Financial Stability Oversight Council Annual Report to Congress