Washington, D.C. — BPI President and CEO Greg Baer released the following statement today on the FSOC vote to update its procedures for nonbank designation:
Today’s FSOC vote to update its procedures for designating nonbank firms systemically important is an important step forward in preserving the stability of the financial system. We have continually made the point that activities with the same risk should have the same regulation, whether at a bank or nonbank. As regulatory pressures continue to push risk out of the banking system, that risk does not go away; rather, it accumulates in places where it is less understood and less regulated. Increasingly, too, while immune from regulation ex ante, shadow banks qualify for federal assistance when there is a crisis. We urge FSOC to be thoughtful and judicious as they consider any potential nonbank designation and ensure that major repositories of systemic risk are overseen appropriately.
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The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.
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