During a hearing on the state of the international financial system, House Financial Services Committee Chairman Jeb Hensarling (R-TX) called on U.S. Treasury Department Secretary and Financial Stability Oversight Council (“FSOC”) Chair Jacob Lew to “cease and desist” from designating more financial firms as “too big to fail” until there is an opportunity for greater congressional oversight of the FSOC’s decision-making process.
According to Chairman Hensarling, there “is increasingly bipartisan concern about the immense discretionary power that FSOC has and how frankly little transparency it has,” stating that there is little indication of a methodology behind FSOC’s ability to effectively put nonbank institutions into bailout positions.
Chairman Hensarling pressed Secretary Lew further to explain FSOC’s decision making during a question-and-answer exchange at the hearing.
See: Video of Question-and-Answer Exchange; House Financial Services Committee Press Release.
See also: Webcast of Full Hearing; Secretary Lew’s Testimony.
Related news: Representative Garrett Questions the SIFI Designation Authority Granted to FSOC by Dodd-Frank (May 6, 2014); House Subcommittee Chair Garrett Delivers Opening Remarks at Oversight of SEC Hearing, Focuses on FSOC and NMS (April 30, 2014); House Financial Services Subcommittee Chairman Introduces Legislation to Reform FSOC (April 4, 2014); SEC Commissioner Aguilar Gives FSOC Thumbs-Down on Mutual Funds, Discusses Cybersecurity and Reg. NMS (April 3, 2014).