FSOC financial stability Oversight Cncl
"Main Street Growth Project" Goes to Bat for Giant Financial Institutions
A $100,000 grant also helped flush out a previously unknown entity called the Main Street Growth Project. The grassrootsy website says the group is working on behalf of regular checking-account holders, small businesses, small investors and community banks tofight the Financial Stability Oversight Council (FSOC), an oversight body created by Dodd-Frank Wall Street reform bill.
But those "regular checking-account holders" should have $50 billion or more to catch the "Main Street Growth Project's" attention. The policies that the "Main Street" group is working on would largely affect the massive financial institutions that meet the threshold for a "systemically important financial institution" and trigger extra regulatory scrutiny under Dodd-Frank.
During the 2008 financial crisis behemoth institutions like insurer AIG helped create the crisis and spread the contagion around the globe by peddling dangerous derivatives products, but because they were not regulated like banks (which can be taken over and dissolved by the FDIC), the federal government struggled to resolve the serious threats posed to the economy by the collapse of AIG.
Part of the solution was to create an uber-oversight body authorized to break apart or even shut down massive financial institutions threatening the U.S. and global economy called the Financial Stability Oversight Council (FSOC). While the Main Street Growth website presents the FSOC board members as random Obama appointees, in factit includesthe most powerful financial regulators in the country, including the Secretary of the Treasury, the Fed Chair, and the heads of the SEC, FDIC, CFTC, OCC and more.
Main Street Growth Project was started by former Romney and Paul Ryan staffers as well as AEI's Paul Wallison to help institutions fightthe "systemically important financial institution" designation. They comfort asset managers: "You didn't cause the financial crisis. But now you're getting caught in the regulatory crossfire. We're here to help."
Today, as David Dayen reports, the roll back of the modest Dodd-Frank protections against another financial collapse is still priority number one for the GOP Congress. Among other attacks on the bill, the GOP wants "to raise the asset threshold for automatically labeling a 'systemically important financial institution' (SIFI) from $50 billion to $500 billion, giving big firms relief from expanded regulation under Dodd-Frank. They would also give existing SIFIs ways to wiggle out of the designation."