Switching from Tea to Gatorade
As we noted, CFPB Director Chopra has referred to the Financial Stability Oversight Council as a “book-report club.” We don’t disagree – each lengthy annual report has seemed more a compendium of financial-sector facts than a guide to action based on any of them. However, last week’s FSOC meeting seemed to move from reading to at least talking about intervening, with the readout making it clear that hedge funds are first on the systemic chopping block now that the Council has finalized its systemic methodology (see FSM Report SYSTEMIC98). Mr. Chopra is especially emphatic about the need to use FSOC’s newly-revised designation power (see FSM Report SIFI37) to name names and set standards. His target is big tech and the Council’s report this year and its focus on AI may move it slightly in that direction at some future point.