August 20, 2013
The Fed Shows The SEC Why It Is So Wise
Posted by David Zaring

It is because, to channel Nietzsche, the Fed "writes such good books."  The good book-length rule* it wrote on Friday puts companies overseen by the Financial Stability Oversight Council (the Dodd-Frank committee of agencies, remember) on the hook for $440 million annually - to be paid to the Fed itself.  Those are supervision fees, and the Fed is the FSOC's designated supervisor.  Banks with over $50 billion in assets and nonbanks designated as important by the FSOC have to pay for that additional FSOC supervision, and the Fed has now told them how much it will cost.

The SEC, which is on the FSOC, can only be jealous.  It's been after self-funding for forever.  And the Fed doesn't even need this new stream of income.  It already makes banks pay for supervision, and of course it also makes money on currency trades.


*Okay, the rule's not so long.  A trim 31 pages, with the key decision being that the assessments are basically going to be apportioned by size, rather than by complexity, dangerousness, or some other criteria - a fact that has not pleased the American Bankers Association. 

Administrative Law, Financial Crisis, Financial Institutions | Bookmark

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