ICI Statement: FSOC Seeking “Pretexts” to Designate Funds
By Mike McNamee
Thu Apr 24 00:00:00 EDT 2014
ICI President and CEO Paul Schott Stevens today made the following statement in response to media reports that the Financial Stability Oversight Council (FSOC) has stepped up its review of major asset managers—which could lead to their designation as “systemically important financial institutions,” or SIFIs—based on boilerplate metrics:
“If these reports are correct, the FSOC process has gone badly awry. These reports suggest that the Council is less concerned with serious deliberation about risks to the financial system than it is with finding pretexts to subject regulated funds and their managers to unprecedented Federal Reserve oversight. The impact on funds and millions of investors will be highly adverse.
“Congress should revisit the FSOC and its designation process for non-bank institutions. FSOC must not operate as a ‘black box.’ Its process must be revised to assure an open and objective analysis, and to make it fair to those subject to its actions, transparent to the public, and accountable to Congress. Such a process would clearly establish that regulated funds and their managers do not pose systemic risk.”
Mike McNamee is ICI’s Chief Public Communications Officer.