The United States’ most powerful financial regulators gathered on March 24 by video conference for an unscheduled, closed meeting of the Treasury Department’s Financial Stability Oversight Council (FSOC), the department announced in a statement. Treasury Secretary Janet Yellen convened the meeting.
Details were sparse in the Treasury statement, but it said Federal Reserve Bank of New York staff gave a presentation on market developments. The gist of the presentation was reassuring:
“The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient.”
In addition, the council discussed member agencies’ efforts to monitor financial developments.
The functions of the FSOC under the law are “identifying risks to the financial stability of the United States; promoting market discipline; and responding to emerging threats to the stability of the U.S. financial system.”
Markets have reacted sharply to practically every word Yellen and meeting attendee Federal Reserve Board Chair Jerome Powell have uttered publicly as concern about the American banking crisis spread.
House Financial Services Committee Subcommittee Chairs Andy Barr and Bill Huizenga sent a letter to Yellen on March 24 asking for the unredacted minutes of the March 12 FSOC meeting and a special March 10 meeting with council “leaders” to discuss the collapse of Silicon Valley Bank and other information.
REVEALED: A 2018 report from the Financial Stability Oversight Council shows regulators knew about Silicon Valley Bank's huge uninsured deposits & threat of a bank run.— David Sirota (@davidsirota) March 20, 2023
But then regulators didnt do anything.
Story here: https://t.co/WnBok11NjY
See the smoking gun chart here pic.twitter.com/gqaGHaZipi
Barr and Huizenga criticized the FSOC’s transparency and added, “FSOC’s failure to maintain its own website or issue its own press releases blurs the distinction between your role as Chairperson of the FSOC and as Secretary of the Treasury.”
Related: US Financial Stability Oversight Council identifies stablecoins and cryptos as threats to financial system
The FSOC has repeatedly urged Congress to pass legislation regulating crypto, calling for lawmakers to decide which regulator will oversee the crypto spot market and urging Congress to close regulatory gaps.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom