In its first meeting Friday, the Financial Stability Oversight Council approved several documents and resolutions, including an advance notice of proposed rulemaking (ANPR) on designating nonbank financial companies for heightened supervision and a request for information regarding the council's ‘Volcker Rule’ study and recommendations.
Established under the Dodd-Frank Act, the council is tasked with identifying threats to the financial stability of the U.S. Among those in attendance Friday were the council's chairman, Treasury Secretary Tim Geithner, Federal Reserve Chairman Ben Bernanke, Federal Housing Finance Agency Acting Director Edward DeMarco and Federal Deposit Insurance Corp. Chairwoman Sheila Bair.
The council approved bylaws and a transparency policy, in addition to the ANPR. The Dodd-Frank Act gives the council a mandate to designate systemically important nonbank financial firms for heightened supervision.
The Treasury Department says the ANPR is an initial step in the process by which the council will develop a framework for the designation of nonbank financial companies for heightened supervision. The ANPR consists of 15 questions to solicit public comment regarding the implementation of these provisions and will have a 30-day public-comment period. The council expects to take final action on the designation criteria and process by the end of March.
The Dodd-Frank Act also requires the council to conduct a study and make recommendations for the Volcker Rule by Jan. 22, 2011. Named after former Federal Reserve Chairman Paul Volcker, the rule will prohibit proprietary trading activities and certain private-fund investments.
SOURCE: U.S. Treasury Department