FSC Majority | Week in Review
Washington,
September 19, 2014 -
Subcommittee Examines the Financial Stability Oversight Council ("FSOC")
The Oversight and Investigations Subcommittee held a hearing on Wednesday to examine FSOC's operations, policies, and procedures. The subcommittee discussed the FSOC's failure to address recommendations from the Government Accountability Office (GAO) and highlighted the need for greater transparency and accountability.
"The FSOC may well be the least transparent federal entity in the government. Of the 42 meetings held, no substantive description of discussions or members' perspective have been provided in the meeting minutes. In fact, two-thirds of the meetings were held in executive session, completely closed off to the public," said Subcommittee Chair Patrick McHenry (R-NC). "Even Congress, which created the FSOC and its unprecedented authority under Dodd-Frank, has been denied access to their process."
"Therefore, it is not shocking that the GAO concluded that almost two years after its 2012 report, that the FSOC has not made satisfactory progress in terms of complying with many of its recommendations, including those intended to ensure that the FSOC has a comprehensive set of systemic risk indicators, whether or not it's coordinating and clarifying rules with OFR and other regulators, and whether or not it has the ability to assess adequately the effect of SIFI designations on the market and on the designated companies," added Chairman McHenry.
"We all want to see the process opened up; we want to see what's happening," said Rep. Sean Duffy (R-WI). "I would look at the bipartisan effort and message that's been sent from this committee and go back and have a solid conversation and review the policies at FSOC."
MEMBER SPOTLIGHT
Rep. Michael Fitzpatrick | House Approves Fitzpatrick Jobs Bill
“This is a jobs bill – by repealing and reforming burdensome regulations, we can set businesses and working capital free to invest in the economy and to create jobs,” Fitzpatrick said in a speech on the House floor.
Weekend Must Reads
Daily Caller | CFPB Is No ‘Start-Up’ Agency, It’s The Same Old Bureaucracy And Should Be Repealed
No one at the CFPB, for instance, can tell the Inspector General’s office who actually made the decision to renovate the building. So a board given the responsibility to protect the financial welfare of American consumers can’t even account for who authorized their own $215 million office space. Congress certainly didn’t. That’s because the CFPB, unlike a typical government agency, does not have to return to Congress every year for budgetary and spending approval. When Democrats forced the Dodd-Frank bill into law with the support of just a few Republicans, they made sure the CFPB was funded out of a fixed percentage of the Federal Reserve’s budget. This essentially placed the agency beyond the reach of one of Congress’s core constitutional powers as well as the oversight the annual appropriations process provides.
Investor's Business Daily | Fed Prepares To Raise Rates, End Failed QE Policy
As rates rise, big questions remain: Will the higher rates the Fed is engineering sink the economy? Will we see unemployment return to recession levels? It doesn't seem likely. And yet, in 2008, if someone had told you that the Census Bureau would report in September 2014 that median income had shrunk 8.2% over the preceding five years, and only those with the highest incomes would see any gains at all, you might have thought that person was crazy. Well, it happened. Thanks to President Obama's misbegotten economic policies and "stimulus," and the Fed's own radical experiment in money printing, the U.S. has had its worst recovery ever from a recession. To its credit, perhaps, the Fed is now quietly trying to undo its failed experiment, by letting markets set interest rates and shutting down the QE program. If so, it's a minor victory for common sense and policy prudence.
 In the News
CNBC | Rep. Hensarling's economic outlook
American Banker | House Lawmakers Press FSOC for More Transparency
Reuters | Watchdog says U.S. risk council lacks tools to spot market threats
The Hill | GAO: Dodd-Frank's stability council falling short
Wall Street Journal | Yellen's Discretion
Wall Street Journal | Dodd-Frank's Collateral Damage in Africa
Wall Street Journal | The Outlook: Fed Sizes Up Alternate Rate-Hike Paths
Pittsburgh Tribune-Review | Risk and Compliance Specialists in Demand
The Hill | Greenspan: Congress Should Kill Ex-Im Bank
Business Insurance | Insurance Groups Hail House Approval of Capital Standards Bill
Daily Caller | Dodd-Frank Agency Flopping
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