{"database": "press", "table": "releases", "rows": [["http://royce.house.gov/news/documentsingle.aspx?DocumentID=397846", "Rep. Royce Questions FSOC on OFR Transparency and Insurance Designations", "2015-12-08", "2015", "2015-12", "Republican", "House", "CA", "Edward Royce", "R000487", "royce.house.gov", null, null, "legacy", "Washington, D.C.  U.S. Representative Ed Royce (R-Calif.) questioned members of the Financial Services Oversight Council (FSOC) regarding regulators creating systemic risk, transparency at the Office of Financial Research (OFR), and the designation of insurers as systemically important financial institutions (SIFIs) during today's House Financial Services Committee hearing \"Oversight of the Financial Stability Oversight Council.\" \"Last month, in ahearingbefore this Committee about due process issues with the FSOC, Professor Jonathan Macey of Yale Law School stated 'that with respect to the actions that the FSOC have already taken, there is a significant danger of increasing, rather than decreasing, systemic risk.' And his point as he explained was this because the FSOC is ignoring certain risk mitigation strategies and herding entities into particular risk strategies, which decreases diversification and then increases the systemic risk,\" beganRep. Royce. \"This could also happen indirectly with companies making choices to merge, sharing in the cost of compliance and creating greater economies of scale; we have seen this in the banking sector. Or more directly with the implied or explicit backing of the government  as in the case with the GSEs. So I was going to askMr. Curry, do you view the potential for regulators to create systemic risk as a problem? And what actions have you taken to make sure that... the FSOCs designations and the enhanced prudential standards of the Fed are not increasing systemic risk per the thesis that the Yale professor puts forward?\" askedRep. Royce. \"Congressman, the FSOC actually is looking at, and this is referenced in our annual report, some of the consequences of changes within the marketplace including regulatory changes. There are behaviours that have changed, institutions have either left or entered different types of business, the impact to non-banks. Those are all things that we have identified as emerging, or potential emerging, risks that require further monitoring and potential action down the road,\" repliedMr. Thomas Curry, Comptroller of the Currency at the Office of the Comptroller of the Currency (OCC). \"I think it's certainly something that we need to be constantly keeping in mind with all of our regulations, what impacts they're having, what mitigators we ought to be considering in addition,\" addedChair Mary Jo Whiteof the Securities Exchange Commission (SEC) when prompted. I'm trying to better understand how the interaction, on another subject here, between the Office of Financial Research and the FSOC members works. After criticism by this Committee and the public on an OFR report regarding the asset management industry, the FSOC sought public views on the industry and later issued a request for notice and comment on Asset Management Products and Activities. Separately, the SEC put out the OFR report for public comment. Can I ask the panel, do any of you see a reason why all OFR public reports should not be open to public notice and comment? Does anyone take exception to that concept?\" askedRep. Royce,author of theOffice of Financial Research Accountability Act of 2015that would open OFR reports to public notice and comment. \"For the record Mr. Chairman, I'd like to say that the witnesses for the record saw no reason to continue the practice of the OFR not allowing for public comment on their reports. That's the point I wanted to make, I think it's important that they do so,\" saidRep. Royceafter no witness answered. \"The FSOC has not designated any asset managers as SIFIs  which is a step I support as these firms operate with little leverage, if any, and the risks they manage are borne by those whose funds they invest. But the FSOC is now apparently considering the industry under activities-based regulation, the second prong of Section 113 of the Dodd-Frank Act, rather than material financial distress, the first prong. My question is not about asset managers  but rather how FSOC came to this decision and why a similar process wasnt used when designating insurance companies.Mr. Woodall, is it fair for the FSOC to offer different amounts of process to different industries? Why not take the same amount of time and get it right?\" concludedRep. Royce. \"The Council is young, it's evolving. I welcome the idea of taking a pause and getting into looking at activities across a segment. I hope that they will do that for the insurance industry too,\" repliedMr. Roy Woodall, the Independent Member with Insurance Expertise of FSOC.\nWatch Rep. 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