The U.S. financial regulatory structure could be streamlined to improve effectiveness, according to a report published yesterday by the U.S. Government Accountability Office. The GAO said that overlap and fragmentation have led to inefficient regulatory processes, as well as inconsistencies in the oversight of similar institutions and in consumer protection. These inefficiencies are likely to be resolved only through congressional action, the report said.
Among other things, the GAO recommended that Congress work to streamline collaboration between the Financial Stability Oversight Council, the Treasury Department’s Office of Financial Research and the Federal Reserve with respect to the monitoring of systemic risk. Congress should consider legislative changes that would better align FSOC’s authorities with its mission, the GAO said. Additionally, lawmakers should also ensure that the Fed and OFR jointly articulate individual and common goals for their systemic risk monitoring activities; engage in collaborative practices in support of these goals; and share tools, assessments and results with the FSOC’s Systemic Risk Committee.