September 30, 2015
“During recent hearings before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, numerous witnesses have expressed concerns regarding the Financial Stability Board (FSB),” said Chairman Shelby in the letter. “While the concerns pertain generally to the lack of transparency and accountability surrounding the FSB’s deliberations and decisions, I would like to bring three specific concerns to your attention.”
“First, the FSB is reviewing and designating U.S. entities as systemically risky without the due process that is intrinsic to our regulatory framework,” continued Shelby. “Second, some FSB actions may unfairly benefit European entities over our U.S. market participants. Third, the role that U.S. regulators play in international regulatory discussions is unclear. This lack of transparency is concerning because the FSB’s decisions appear to influence the deliberations of the Financial Stability Oversight Council (FSOC) and its subsequent designations.”
The full text of Chairman Shelby’s letter is as follows:
September 29, 2015
First, the FSB is reviewing and designating U.S. entities as systemically risky without the due process that is intrinsic to our regulatory framework. Second, some FSB actions may unfairly benefit European entities over our U.S. market participants. Third, the role that U.S. regulators play in international regulatory discussions is unclear. This lack of transparency is concerning because the FSB’s decisions appear to influence the deliberations of the Financial Stability Oversight Council (FSOC) and its subsequent designations.
In order to provide greater transparency of the international processes that involve U.S. entities, please answer the following questions:
Shelby Presses Treasury Secretary, Fed Chair, & SEC Chair on FSB Influence, Transparency
WASHINGTON, DC – Wednesday, September 30, 2015 – U.S. Senator Richard Shelby (R-Ala.), Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to Treasury Secretary Lew, Federal Reserve Chair Yellen, and SEC Chair White regarding the influence and transparency of the Financial Stability Board (FSB).
In the letter, Chairman Shelby detailed several concerns regarding the FSB and requested detailed responses to questions regarding the international process that directly impacts U.S. entities.
“During recent hearings before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, numerous witnesses have expressed concerns regarding the Financial Stability Board (FSB),” said Chairman Shelby in the letter. “While the concerns pertain generally to the lack of transparency and accountability surrounding the FSB’s deliberations and decisions, I would like to bring three specific concerns to your attention.”
“First, the FSB is reviewing and designating U.S. entities as systemically risky without the due process that is intrinsic to our regulatory framework,” continued Shelby. “Second, some FSB actions may unfairly benefit European entities over our U.S. market participants. Third, the role that U.S. regulators play in international regulatory discussions is unclear. This lack of transparency is concerning because the FSB’s decisions appear to influence the deliberations of the Financial Stability Oversight Council (FSOC) and its subsequent designations.”
The full text of Chairman Shelby’s letter is as follows:
September 29, 2015
Dear Secretary Lew, Chair Yellen and Chair White:
During recent hearings before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, numerous witnesses have expressed concerns regarding the Financial Stability Board (FSB). While the concerns pertain generally to the lack of transparency and accountability surrounding the FSB’s deliberations and decisions, I would like to bring three specific concerns to your attention.
First, the FSB is reviewing and designating U.S. entities as systemically risky without the due process that is intrinsic to our regulatory framework. Second, some FSB actions may unfairly benefit European entities over our U.S. market participants. Third, the role that U.S. regulators play in international regulatory discussions is unclear. This lack of transparency is concerning because the FSB’s decisions appear to influence the deliberations of the Financial Stability Oversight Council (FSOC) and its subsequent designations.
In order to provide greater transparency of the international processes that involve U.S. entities, please answer the following questions:
1) Do systemic designations supported by your agencies in international discussions reflect decisions made first domestically through the appropriate U.S. regulatory and statutory processes? If so, please cite the process.
2) Do the international discussions in which you or your agency participate have the same level of transparency and public input as is required by established U.S. regulatory processes?
3) Do you solicit input and/or feedback from impacted U.S. entities and the public on issues that are discussed and decided upon at the FSB? If so, how?
4) How do you ensure that any international designation process in which your agencies participate have clear and consistent public guidelines?
5) Are FSB designations subject to rigorous and regular reexaminations? Are U.S. entities allowed to appeal and potentially exit an FSB designation?
Thank you in advance for your detailed responses. I look forward to hearing from you by October 15, 2015.
Sincerely,
Richard Shelby
Chairman
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