A subcommittee of the House Financial Services Committee held a hearing on the discretionary authority of the Financial Stability Oversight Council to designate non-bank financial firms as "Systemically Significant Financial Institutions" under the Dodd-Frank Financial Reform Law.
The hearing targeted what the “systemically important” designation means for a company in terms of competition and risk-taking, and how FSOC arrived at its final rule for the designation, which could affect insurance companies and other non-bank institutions. Some critics are saying the rule essentially aids firms that are "too big to fail," and would require a federal government bail-out, rather than eliminating them, as the Dodd-Frank bill intended.
The first panel features two members of the Financial Stability Oversight Council, Lance Auer, deputy assistant secretary of the Treasury for financial institutions, and Michael Gibson, director of the Division of Banking Supervision and Regulation for the Federal Reserve's Board of Governors. The Financial Stability Oversight Council is an interagency task force created by the Dodd-Frank financial overhaul law.
The second panel focused on an analysis of the "systemically important" designation from Scott Harrington, a professor at the Wharton School of the University of Pennsylvania; Thomas Quaadman, vice president of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce; William J. Wheeler, president of the Americas for MetLife; and Douglas Elliot, a fellow at the Brookings Institution.
Rep. Shelley Moore Capito (R-WV) chairs the subcommittee. Rep. Carolyn Maloney (D-NY) serves as the Ranking Member.