WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with the Federal Reserve Board’s (“Fed”) announcement of a final rule that updates risk management requirements for systemically important financial market utilities (“FMUs”) that it supervises.
“Just like the power grid or the sewer system, the infrastructure that supports our financial system is of critical importance to all Americans, but often invisible until it breaks down. FMUs provide the critical foundation for our financial system, facilitating payments such as wire transactions, automated clearinghouse system payments, and check deposits. FMUs process trillions of dollars of payments each day and as a result, all Americans can conduct basic transactions such as receiving a paycheck, transferring money, or paying bills with ease.
“The Fed’s final rule made critical updates and improvements that will hold systemically important FMUs accountable for effective management of operational and technology risks, which in turn supports the safety and soundness of the financial system and overall financial stability. We are pleased to see that the Fed implemented many of the recommendations that were included in our comment letter: incident management and notification, including for cybersecurity disruptions; business continuity planning; and third-party risk management.
“The updates in this final rule were long overdue because the prior regulations had not been changed since 2014. Technology risks and cyberattacks that were once considered to be infrequent tail-risks have become much more prevalent in the last decade and FMUs must have appropriate tools and processes to protect our critical financial infrastructure from failure because of these events. Similarly, new operational risk challenges such as a global pandemic and severe weather have demonstrated the range and seriousness of vulnerabilities for which FMUs must prepare and protect. All Americans deserve to count on a secure, resilient, and strong payments system and we believe that this final rule makes necessary improvements to achieve that goal.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
