https://en.sputniknews.africa/20230422/us-to-strengthen-powers-to-mitigate-risks-from-non-bank-financial-firms-1058769732.html
US to Strengthen Powers to Mitigate Risks From Non-Bank Financial Firms
US to Strengthen Powers to Mitigate Risks From Non-Bank Financial Firms
Sputnik Africa
The United States will strengthen its powers to mitigate risks from non-bank financial firms following regional bank failures, Treasury Secretary Janet Yellen said.
2023-04-22T08:34+0200
2023-04-22T08:34+0200
2023-04-22T08:35+0200
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"We are proposing revisions to certain elements of the Council’s existing guidance that have made it difficult to use its nonbank designation authority," Yellen said, chairing a meeting of the Financial Stability Oversight Council, or FSOC. "The designation tool serves as an important part of our post-Global Financial Crisis defense. It is an important preventative tool to address systemic risks that may arise from a nonbank financial firm whose activities or distress could threaten the financial system. We are acting today to restore the effectiveness of this authority." The US banking industry was shaken by the collapse of two regional lenders — Silicon Valley Bank and Signature Bank — last month that a review by financial regulators later showed was a result of poor management decision-making that prioritized short-term returns over long-term fidelity. The FSOC is staffed by the most powerful regulators in the US financial industry, including Yellen, Federal Reserve Chair Jerome Powell, Securities and Exchange Commission Chair Gary Gensler, Acting Comptroller of the Currency Michael Hsu and Commodity Futures Trading Commission Chair Rostin Behnam. Yellen said the panel needs to remove "inappropriate hurdles" to designating non-bank firms for supervision. Yellen said the US banking system has stabilized since the March crisis and "remains sound". Despite that, the FSOC needs to be vigilant and closely monitor financial system conditions, she said.
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US to Strengthen Powers to Mitigate Risks From Non-Bank Financial Firms
08:34 22.04.2023 (Updated: 08:35 22.04.2023) WASHINGTON (Sputnik) - The United States will strengthen its powers to mitigate risks from non-bank financial firms following regional bank failures, Treasury Secretary Janet Yellen said.
"We are proposing revisions to certain elements of the Council’s existing guidance that have made it difficult to use its nonbank designation authority," Yellen said, chairing a meeting of the Financial Stability Oversight Council, or FSOC. "The designation tool serves as an important part of our post-Global Financial Crisis defense. It is an important preventative tool to address systemic risks that may arise from a nonbank financial firm whose activities or distress could threaten the financial system. We are acting today to restore the effectiveness of this authority."
The US banking
industry was shaken by the collapse of two regional lenders — Silicon Valley Bank and Signature Bank — last month that a review by financial regulators later showed was a result of poor management decision-making that prioritized short-term returns over long-term fidelity.
The FSOC is staffed by the most powerful regulators in the US financial industry, including Yellen, Federal Reserve Chair Jerome Powell, Securities and Exchange Commission Chair Gary Gensler, Acting Comptroller of the Currency Michael Hsu and Commodity Futures Trading Commission Chair Rostin Behnam.
Yellen said the panel needs
to remove "inappropriate hurdles" to designating non-bank firms for supervision.
"The March banking turmoil demonstrates that more work is needed to strengthen the regulatory and supervisory regimes," she added.
Yellen said the US banking system has stabilized since the March crisis and "remains sound". Despite that, the FSOC needs to be vigilant and closely monitor financial system conditions, she said.
