BETTER MARKETS STATEMENT ON FSOC MEETING

Dennis Kelleher, Better Markets President and CEO, made the following statement after the Financial Stability Oversight Council met today and issued one final rulemaking:

The importance of the Financial Stability Oversight Council cannot be overstated. It alone is responsible for the financial system as a whole and doing everything necessary to ensure financial stability and prevent another financial crisis.

Its structure and history are not encouraging. A majority of the 15 regulators have historically been turf-protecting competitors rather than collaborators, and industry advocates, if not cheerleaders, rather than reformers. Moreover, many of them failed completely in their regulatory responsibilities in the decade leading up to the last crisis. From this, the FSOC must become a foresighted and aggressive leader for financial reform committed to protecting the public and the public treasury.

Unfortunately, thus far its public meetings are reminiscent of the old, heavily-scripted Soviet Politburo meetings: everyone sticks to the script and the party line.

Confining themselves narrowly to what they are specifically required to do by the statute simply will not fulfill FSOC’s critical role. Admittedly, it is still a very new council and the individual members have innumerable other institution-specific reform obligations. Nevertheless, FSOC must lead on financial reform, be aggressive in pushing itself and other agencies to go further, faster, and protect the public, promote financial stability and prevent more unconscionable bailouts.

We look forward to great things from the FSOC and we eagerly await signs that those great things are on the way.