Senate Banking Committee Chair Asks Treasury Secretary to Review "Full Framework" of U.S. Bank Regulation to Address Current Risks
Senate Banking Committee Chair Sherrod Brown (D-OH) asked Treasury Secretary Janet L. Yellen and the Financial Stability Oversight Council (“FSOC”) to examine the "full framework of regulations protecting depositors, consumers, and the U.S. financial system" in order to strengthen the financial system against current risk.
In a letter, joined by 11 members of the Committee, Mr. Brown asked Ms. Yellen to assess the following areas of risk and provide recommendations on:
- “traditional,” quantifiable risks within prudential regulations (e.g., liquidity and interest rate risk management of funding sources that are considered “less durable,” such as uninsured deposits);
- qualitative risks resulting from the influence of social media and algorithmic marketing on bank safety and soundness and consumer protection;
- emerging risks within the financial sector, such as market volatility due to geopolitical, economic and financial events;
- the level of access for banks and credit unions to federal liquidity backstops to prevent contagion and promote financial stability;
- state and federal supervision and examination of financial institutions and regulators’ ability to enforce the law; and
- regulators’ authority to hold executives accountable for mismanaging financial institutions.
The legislators asked for a response within 60 days from when the letter was dated.
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