Treasury Secretary Geithner testified today before the Senate Banking Committee on the Financial Stability Oversight Council’s efforts to manage systemic risk and implement the Dodd-Frank Act.  Although the E.U. debt crisis was the most pressing area of concern for the Senators, Basel III, housing reform, derivatives, and shadow banking were all generally discussed.  Defending the pending systemic regulatory regime, the Secretary supported the G-SIB surcharge (see FSM Report SYSTEMIC45), arguing that it will address possible international differences even as he called for more action to reduce risk-weighting variations in different regimes.  Mr. Geithner also said that FHFA would be providing a mortgage refinancing proposal within the next few weeks. He confirmed that FSOC will again take up the nonbank SIFI designation (see Client Reports in the SYSTEMIC Series).

In addition to the hearing, the nomination of Richard Cordray passed along party lines, with Ranking Member Shelby (R-AL) stating that the confirmation process would not proceed without reforms to the agency’s structure and oversight.  FedFin Client Report FSOC5 assesses the session.

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