WASHINGTON — The Financial Stability Oversight Council discussed one of its most powerful tools in a closed session on Friday, setting the stage for a potential resurgence in relevance for the group of financial regulators who saw their abilities severely undercut during the Trump administration.
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Guidance issued by the Trump administration effectively took away FSOC's ability to designate specific nonbank financial firms seen as a danger to the global markets, which would in turn subject them to banklike oversight. While Treasury Secretary Janet Yellen has suggested that she wants to overturn that guidance, she hadn't taken any public steps in that direction.
But FSOC, the body of regulators established in the wake of the 2008 financial crisis to act as an early warning system for weaknesses in the financial system, heard a presentation from Treasury's staff on "options for assessing and responding to financial stability risks, including the process for designating nonbank financial companies for Federal Reserve supervision and prudential standards."
Treasury Secretary Janet Yellen has suggested in the past that she wants to take another look at the Trump-era designation guidance for the Financial Stability Oversight Council. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
A Treasury spokesperson declined to comment further.
Aside from Yellen, other financial regulators have hinted that they want to revisit the government's ability to designate nonbanks as systemically important.
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