FSOC

The Financial Stability Oversight Council's annual report underscores mounting challenges in commercial real estate, escalating cyber threats, and regulatory gaps in third-party services and stablecoins, urging stronger oversight and legislative action.

President Biden plans to direct his administration to develop a strategy on climate-related risks for public and private financial assets, according to a draft document seen by Bloomberg News.

The Financial Stability Oversight Council has struggled to find its footing since its creation in Dodd-Frank. The Treasury secretary has signaled a more aggressive role for the panel, including reviving its authority to target nonbank behemoths.

Treasury Secretary Janet Yellen said she prefers to have the Financial Stability Oversight Council flag hazardous activities by nonbanks rather than subject specific firms to heightened supervision.

The Financial Stability Oversight Council could determine that a broad range of mortgage companies should be subject to “heightened prudential standards,” said Andrew Olmem, a partner at Mayer Brown and a former senior economic adviser to the White House.

The Financial Stability Oversight Council said the mortgage giants may need a bigger capital cushion than their regulator has proposed, but stopped short of designating them as “systemically important financial institutions.”

The council created by the Dodd-Frank Act to identify systemic risks launched a review of the market as part of an activities-based approach that shifts focus away from targeting individual firms.

After budget cuts and a strategic transition, the interagency body conceived by Dodd-Frank to identify systemic threats has largely been silent as the pandemic roils the economy.

Years after criticizing the Dodd-Frank Act, the Democratic presidential candidate and former New York City Mayor Michael Bloomberg is now taking a page from the Elizabeth Warren playbook.

The Treasury secretary suggested a role for lawmakers in containing any fallout with financial contracts stemming from the transition to a new interest rate benchmark.

A report from the Financial Stability Oversight Council cited a bigger share of originations and servicing by nonbanks as a potential vulnerability in the financial system.

There is bipartisan agreement in the Senate that Fannie Mae and Freddie Mac are "too big to fail," but some lawmakers are skeptical that a SIFI designation is appropriate.

Although higher corporate debt could hurt the economy, Federal Reserve Chair Jerome Powell argued changes made since the last crisis will guard against a meltdown.

The ranking Democrat on the Senate Banking Committee says he wants answers from the Financial Stability Oversight Council on efforts to address corporate debt risks.

The 2020 budget would add the Consumer Financial Protection Bureau and FSOC to congressional appropriations, charge lenders for FHA upgrades and require universities to have skin in the game on student loans.