FSOC Nears Vote on Naming Systemically Risky Nonbanks
By Donna Borak
The Financial Stability Oversight Council is close to identifying several nonbank financial companies as systemically risky after spending years ironing out how it would undertake the first-time effort. The council, headed by Treasury Secretary Jacob Lew, will meet on Monday in closed session with 15 members of the interagency group, including Federal Reserve Board Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Martin Gruenberg. An agenda of the meeting has not been released, but it is widely expected the council will vote on designating at least three firms as systemically important financial institutions. “The buzz is they’re finally steeled to declare a firm systemically risky,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics. “If it doesn’t happen now, it will be concluded it never will.”