Herding watchdogs

9 October 2014 By Daniel Indiviglio

The Justice League of regulators created under the Wall Street reform act has been meeting regularly to monitor systemic risks. The Financial Stability Oversight Council could be doing a whole lot more, though. That will require an authoritative leader to knock heads together.

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The U.S. Government Accountability Office released a report on Sept. 17 detailing ways for the Financial Stability Oversight Council to improve risk identification, transparency, accountability, collaboration and coordination.

The watchdog’s conclusions included urging the FSOC to develop a strategy to improve communication with the public and policies to clarify when collaboration or coordination between regulators should occur – as well as keeping detailed records of closed-door sessions.

The report also recommended that the council create a framework for assessing the impact of its decisions to designate large financial firms as systemically important and to adopt popular practices for better collaboration.

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