News Release 2019-24 | March 6, 2019
Comptroller of the Currency Supports FSOC’s Proposal for an Activities-Based Approach to Identify Potential Market-wide Risks
WASHINGTON—Comptroller of the Currency Joseph Otting today issued the following statement supporting the Financial Stability Oversight Council’s (FSOC) decision to propose an activities-based approach for identifying potential market-wide risks and to amend the process for designating nonbank financial companies systemically important.
I support the proposal to revise the nonbanks interpretive guidance, which is consistent with the recommendations in the November 2017 U.S. Treasury Report.
The proposal shifts the FSOC’s focus away from the designation of individual companies as systemically important to an activities-based approach for identifying potential market-wide risks to financial stability. This approach would rely on the expertise of the primary regulators to address the identified risks. Should the FSOC consider designating a nonbank financial company as systemically important, the proposal includes positive changes to the process. Such changes include the addition of a determination of the likelihood of the company experiencing material financial distress and an analysis of benefits and costs.
The proposal ensures FSOC continues to serve its primary function in a transparent, efficient, and effective manner.
I thank the FSOC staff and the staff at all of the member agencies for their hard work on this proposal.