Lew reviews FSOC annual report with House committee

In an appearance before the House Committee on Financial Services, Treasury Secretary Lew discussed the 2016 annual report of the Financial Stability Oversight Council (FSOC). He noted the Council, which recently released its sixth annual report, convenes regularly to monitor market developments and to take action when needed to protect the American people from potential risks to the financial system. The current report focused on 12 themes that warrant continued attention and, in many cases, further action from the Council members and member agencies:

• cybersecurity;
• risks associated with asset management products and activities;
• capital, liquidity, and resolution;
• central counterparties;
• reforms of wholesale funding markets;
• reforms relating to reference rates;
• data quality, collection, and sharing;
• housing finance reform;
• risk management in an environment of low interest rates and rising asset price volatility;
• changes in financial market structure and implications for financial stability;
• financial innovation and migration of activities; and
• global economic and financial developments.

Lew concluded, “The Council has proven itself as an important forum for the financial regulatory community to come together, identify risks, and work collaboratively to respond to emerging threats to financial stability. It would be a mistake to roll back the clock on these protections or to constrain the ability of the Council or its member agencies to address new risks as they arise, including the Council’s nonbank financial company designations authority.“