Recalibrating regulations is a key part of financial agencies’ role in promoting economic growth, the Financial Stability Oversight Council said today in its annual report. FSOC’s statements reflect the American Bankers Association’s long-held views that outdated and unnecessary rules are holding back growth potential.
“The U.S. financial regulatory system should promote economic growth not just by preventing financial crises that reduce growth, but also by minimizing those regulations that increase costs without commensurate benefits,” said FSOC, citing a number of actions already taken by FSOC member agencies. “Council member agencies should, where possible and without reducing the resilience of the financial system, continue to address regulatory overlap and duplication, modernize outdated regulations, and, where authority exists, tailor regulations based on the size and complexity of financial institutions.”
Created by the Dodd-Frank Act, FSOC is chaired by the Treasury secretary and includes the heads of almost all federal financial regulatory agencies, as well as an independent insurance expert. The council noted several areas that pose risk to financial stability, including the potential of rising deficits to slow down economic growth, rising cyber risks, and the status quo of housing GSEs Fannie Mae and Freddie Mac.