Treasury Secretary Jack Lew delivered testimony on the Financial Stability Oversight Council’s (“FSOC”) 2013 Annual Report at the Senate Committee on Banking, Housing, and Urban Affairs. In particular, Lew discussed cross-border regulations for swaps and stated that foreign officials, who had previously submitted a letter to Lew criticizing the “lack of progress” in developing workable cross-border rules with the CFTC and the SEC, are being overly critical. Lew further discussed the following concerns in his testimony:
- Wholesale funding markets (tri-party repo and money market funds);
- Housing finance reform (getting private capital into the market);
- Operational risks (computer failures at the exchanges, Hurricane Sandy, cyberattacks);
- Reference interest rates (LIBOR);
- Interest rate risk (rates may go up);
- Impacts of fiscal policy;
- Global economic and financial developments.