STATEMENT: The FSOC’s Vote to Remove Barriers to Greater Nonbank Oversight Will Make Our Financial System Safer, Says CAP’s Alexandra Thornton

Washington, D.C. — Today, the Financial Stability Oversight Council (FSOC) released proposals that would advance its congressionally mandated duty to identify and address risks throughout the financial system. This includes a proposal to roll back impediments imposed by the Trump administration and restore the FSOC’s authority under the Dodd-Frank Act to designate risky nonbank financials as systemically important financial institutions (SIFIs), subjecting them to enhanced supervision and regulation. In response, Alexandra Thornton, senior director of financial regulation at the Center for American Progress, issued the following statement: 

These new proposals from FSOC take essential steps toward strengthening our financial system. Not only would they move FSOC forward in its mission, but they would enable it to address emerging risks within our economy quickly and calmly, before those risks contribute to another financial crisis. The bank failures earlier this year exemplify how critical comprehensive financial regulations and oversight are to protecting our financial system. These proposals would ensure we have the tools necessary to keep our financial system on track. I commend the FSOC for undertaking these proposals and look forward to Treasury Secretary Janet Yellen and member agencies working together to finalize the guidance.  

Related resources:

• “5 Priorities for the Financial Stability Oversight Council” by Gregg Gelzinis
• “Strengthening the Regulation and Oversight of Shadow Banks” by Gregg Gelzinis  

For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].