November 14, 2012
The Financial Stability Oversight Council Develops The Oversight Part
Posted by David Zaring
The FSOC is the committee of agencies set up by Dodd-Frank to keep track of systemic risk in the financial system.  It has identified a group of American systemically significant institutions, and has had some meetings.  But the latest from them - pressure on the SEC to go through with reforms to money market funds proposed by Mary Schapiro - is a novel kind of agency oversight.  As the Times notes, the FSOC can't make the SEC pass the rule.  Its only leverage is jawboning, and, in theory, naming money market funds as systemically significant, which would require them to add capital buffers, which is exactly what the industry doesn't want to do.  But really, the best overview of the dynamics here comes from Matt Levine, who doesn't get too deep in the weeds on this one.

Administrative Law, Finance, Financial Crisis, Financial Institutions | Bookmark

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