House Republicans demand documents on systemic risk tags

By Sarah N. Lynch WASHINGTON (Reuters) – A group of Republican lawmakers demanded documents on Friday from U.S. regulators, voicing concerns that decisions about whether to designate large financial companies as systemically risky are unduly influenced by an international body. Senior members of the House of Representatives’ Financial Services Committee said in a letter that they fear the United States may end up surrendering on financial regulatory matters to the Financial Stability Board, a group they referred to as an “international old boys club that deliberates in secret.” The letter was sent to Treasury Secretary Jack Lew, Federal Reserve Chair Janet Yellen, and Mary Jo White, the chair of the Securities and Exchange Commission. The 2010 Dodd-Frank law gave the group the power to dub large financial companies as “systemically” risky if their failure could cascade through the marketplace. Any company deemed systemic is subject to stricter oversight by the Fed. The FSOC has already given three companies this tag – American International Group Inc, General Electric Co’s GE Capital and Prudential Financial Inc. Now, the council is reviewing whether large asset managers such as BlackRock Inc and Fidelity should be next.

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