Posted 4 years ago on July 12, 2012, 5:55 a.m. EST by Middleaged
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Based on the Annual Report for 2011 for the Office of the Comptroller of the Currency OCC... The Financial Stability Oversight Council (FSOC) created by the Dodd-Frank Bill is supposed to monitor Financial Risk and create strategies for dealing with Risks.
"...Financial Stability Oversight Council, or FSOC, the intergovernmental body created by Dodd–Frank to identify risks to the financial system, extend supervision to systemically significant nonbanks, and respond to emerging threats to financial stability. ...By bringing together agencies with responsibilities for every sector of the financial services industry, FSOC will examine risks across the entire financial system and help to avert future financial crises...."
Who are members of the FSOC??
The Council consists of 10 voting members and 5 nonvoting members and brings together the expertise of federal financial regulators, state regulators, and an insurance expert appointed by the President.
1) Timothy F. Geithner (Treasury)
2) Ben Bernanke (Federal Reserve Board)
3) Martin J. Gruenberg (FDIC)
4) Mary Schapiro (SEC)
5) Gary Gensler Commodity Futures Trading Commission (CFTC)
6) Richard Cordray, Consumer Financial Protection Bureau (CFPB) 6) Edward DeMarco, Federal Housing Finance Agency (FHFA)
7) Debbie Matz, National Credit Union Administration (NCUA)
8) Thomas J. Curry, Office of the Comptroller of the Currency (OCC)
9) Roy Woodall, Independent Member with Insurance Expertise
10) Michael McRaith, (FDIC)
11) John P. Ducrest, Louisiana Office of Financial Institutions 12) John Huff, Director, Missouri Department of Insurance, Financial Institutions, and Professional Registration
13) David Massey, Deputy Securities Administrator, North Carolina Department of the Secretary of State, Securities Division 14)
http://www.treasury.gov/initiatives/fsoc/Documents/May%2022,%202012.pdf (Looks like FSOC was talking about trading losses at JP Morgan back in May 2012)
http://www.treasury.gov/initiatives/fsoc/Documents/Macroeconomic%20Environment.pdf (page 4, Regulatory data on business loans less than $1 million and agricultural loans less than $500,000 suggest that small business lending had increased solidly in the years leading up to 2008, before declining by more than 10 percent through 2010 (Chart 4.1.6).)
Look at the FSOC Annual Report for 2011 if you have plenty of time:
Mostly I looked at the section on Macroeconomic issues which is a lot shorter:
http://www.treasury.gov/initiatives/fsoc/Documents/Macroeconomic%20Environment.pdf (Plenty of charts show the problems that we have had since before the Financial Crisis and Sub-pime Mortgage Crisis 2007 -2010)
The section 7 of the FSOC Annual Report is on Financial Stability:
"...Shocks and imbalances can interfere with financial stability through three main interconnected channels:
- Failure of a financial institution or a market participant to honor a contractual obligation.
- Deterioration in market functioning.
- Disruptions in financial infrastructure..."
The Problem with the FSOC Annual Report is that I don't see examination of Risk associated with financial links to other banks or derivatives or asset backed securities.
The FSOC section 7 seems to go over old ground of risk with 5 of the largest bank holding companies, mortgages with negative equity, and financial stress tests.
Chart 7.1.7 is for European Sovereign 5-year CDS Spreads
Chart 7.1.8 is for Insurance Industry Exposure to Europe
US Bank exposures to core European banks in the United Kingdom, Germany, and France are the main concern of the FSOC, and those European banks are the primary international lenders to peripheral European borrowers.
Council members have identified three components of the market infrastructure that require strengthening: (1) mortgage servicing, (2) derivatives, and (3) tri-party repo. Of the three, the weaknesses in the tri-party repo market are most likely to amplify current risks.
The FSOC Annual Report sction 7 doesn't seem to address the "False Ratings" provided by "Ratings Agencies" to finanical instruments like CDOs, ABS (derivatives) or to the coorporations themselve.
The Executive Summary for the FSOC report doesn't mention that there is $1 Tillion Dollar short fall in US Pensions due to funds never being paid in. Also it doesn't address the fact that there is no individual savings account interest rate for Main Street who have given up largely on financial investments for retirement.
Nor is there a clear plan for the US when the 'perfect storm' of European recession, cooling of Chinese economy, state and municipal debt levels, combined with reduced public sector workforces (reduced public sector spending), and no job growth in the US.
Looks like Section 5 of the FSOC Annual Report on Financial Developments is a good one to read if you want to know more about the new financial instruments in the US. I should make time some day to read this...
But the report doesn't explain how Mitt Romney ended up with millions of dollars in an IRA Account.