Rep. Scott Garrett (R-NJ), Chair of the House Capital Markets Subcommittee, has asked the Federal Reserve Bank of New York to share information that it has provided to the Financial Stability Oversight Council (FSOC) related to the process of designating financial firms as systemically important financial institutions (SIFIs). In a letter to the NY Fed, Chairman Garrett said that designating a financial firm as a SIFI could have wide ranging and unpredictable consequences in terms of a company’s competitive position, cost-of-capital, regulatory treatment, and the expectation of government support in the event of its failure. The Chair views it as essential that Congress have sufficient information on this process to perform its legislative and oversight responsibilities.
The request comes against the backdrop of legislation proposed by Chairman Garrett to make FSOC more transparent by, amongm other things, allowing all members of the Commissions and Boards that make up FSOC to attend FSOC. It would also subject FSOC to government in the sunshine mandates.