Senator Mike Crapo (R-ID), Ranking Member on the Banking Committee, is concerned that the asset management study conducted by the Office of Financial Research was a flawed effort that failed to take into account the perspectives of and data from the SEC and market participants. In a letter to Treasury Secretary Jacob Lew in his capacity as Chair of the Financial Stability Oversight Council, Senator Crapo said that the study resulted in a flawed evaluation of the asset management industry and , even worse, a move towards designating asset management firms as systemically significant financial institutions without an accurate understanding of the role they play in the financial system.
He went on to say that the OFR should have engaged in a more transparent and productive way with the SEC and market participants by setting up a transparent process for soliciting comment from the industry and the SEC. who is the primary regulator of asset managers. But unfortunately the OFR did not do this leading to a complete lack of peer review.
This is important, said the Senator because FSOC appears to be contemplating whether or not to designate some asset management firms as systemically important financial institutions. To the extent FSOC intends to rely on information in the OFR study, it is critical that the study contains the best data available and reflects a proper public comment process.