In comments made yesterday to the Institute of International Bankers conference in Washington, U.S. Treasury undersecretary for domestic finance, Mary J. Miller said she expected FSOC to vote on designation of some companies as systemically important and therefore subject to Federal Reserve oversight “in the next few months.”
Under Dodd-Frank, Congress charged FSOC with determining which nonbank financial companies and bank holding companies could potentially pose a threat to financial security in the event of collapse. Designation of companies as systemically important would bring them within the Fed’s purview and subject them to more stringent standards.
Miller said the authority to subject companies to Federal Reserve oversight “is not a power the council wields cavalierly.” She added that FSOC has been engaged in a thorough review, and that “careful assessments of these firms take time.”
American International Group Inc. and General Electric Co.’s financial unit are among the companies currently under review. According to Miller, FSOC is “nearing the end of that process.”
Miller’s comments come on the heels of criticism last week by Sheila Bair, former FDIC chairman, that regulators lacked the spine to make to the SIFI designations.