(Bloomberg) — A panel of U.S. regulators voted to tell companies sooner that it’s considering whether the firms should be deemed a potential risk to the financial system.
The Financial Stability Oversight Council, led by Treasury Secretary Jacob J. Lew, voted 10-0 on a conference call today to notify companies earlier than it does now when discussing whether to designate them systemically important, the Treasury Department said in a statement. Such firms are subject to Federal Reserve oversight, which can include tougher capital, leverage and liquidity requirements.
The vote follows criticism from finance industry groups and lawmakers of both major political parties that the council is too secretive. Companies will now be told when they are being analyzed in the second stage of review, possibly months quicker than they are now, in the third and final stage.
The council is “a young organization that, as it grows and matures, must continue to be flexible and adjust its processes as needed to fulfill its mandate,” Lew said in the statement.
The council, or FSOC, also voted to extend by 30 days the period for the industry and public to comment on the panel’s request for input on whether asset managers’ activities could threaten stability. Groups including the American Bankers Association and the U.S. Chamber of Commerce have requested additional time to comment. The new deadline is March 25.