Observers are wondering how focused successor Jack Lew will be to the Financial Stability Oversight Council in comparison to recently departed Treasury Secretary Timothy Geithner.
"Ever since the Dodd-Frank Act created the council, many have been skeptical that it could function. They cite its sheer size - 10 voting members and five nonvoting members - and its diversity, with the agencies represented covering credit unions, insurance and banking. Yet regulators have said the group has been helpful in airing contentious issues and taken steps toward designating systemically important nonbanks and reforming money market mutual funds," writes American Banker's Donna Borak.
Lew, known almost exclusively for his budgetary work, remains a blank slate concerning critical banking issues, including the implementation of Dodd-Frank. The success of the FSOC relies on the Treasury secretary, who chairs the council and has many other pressing fiscal issues he must address.
"This will be interesting to see," said Satish Kini, co-chair of the banking group Debevoise & Plimpton. "It is very much an open question of how attentive he will be with FSOC, whether he will delegate a greater responsibility to his staff or to the deputy Treasury secretary. I think we will probably see Secretary Lew less involved in some of the details it appears that Secretary Geithner was."
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