FSOC Stays the Course at Senate Banking
In this report, FedFin assesses today’s Senate Banking Committee hearing reviewing FSOC’s annual report (see Client Report FSOC10). Discussion touched on LIBOR, capital standards, housing finance, and wholesale-funding markets, although senators from both parties seized the opportunity to interrogate Secretary Lew about the recent IRS audit of conservative 501(c)(4) organizations. Secretary Lew highlighted the need to finalize Dodd-Frank before considering additional reforms, such as the capital requirements proposed in the Brown-Vitter legislation (see FSM Report TBTF8), and stressed the need for housing finance reform without advancing any particular initiative to wind down the GSEs. He also disagreed with Sen. Warren’s (D-MA) assertion that immediate action is needed to cap the size of the largest banks and reiterated his strong disagreement with foreign finance ministers protesting pending CFTC extraterritoriality guidance. This report analyzes the hearing, which revealed little about the regulatory forecast amidst partisan bickering over the IRS audit revelations.
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