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Systemic Risk Authority Transparency Act
8/17/2024, 8:26 PM
Summary of Bill HR 4116
The key provisions of the bill include requiring the FSOC to hold public meetings and provide detailed explanations for its decisions, as well as requiring the council to publish its criteria for designating nonbank financial companies as systemically important. Additionally, the bill calls for the establishment of an independent advisory committee to provide input and recommendations to the FSOC.
Supporters of the bill argue that increased transparency and accountability in the oversight of systemic risk will help to prevent another financial crisis and protect taxpayers from having to bail out failing financial institutions. Critics, however, have raised concerns about the potential impact of the bill on the ability of the FSOC to act quickly and decisively in response to emerging risks. Overall, the Systemic Risk Authority Transparency Act represents an important effort to improve the transparency and effectiveness of the oversight of systemic risk in the financial system. It will be important for lawmakers to carefully consider the potential benefits and drawbacks of the bill as it moves through the legislative process.
Congressional Summary of HR 4116
Systemic Risk Authority Transparency Act
This bill requires banking regulators to submit a report to Congress in the event of the failure of an insured depository institution that leads to a systemic risk determination by the Department of the Treasury.
Regulators must report confidential supervisory information relating to the institution, any institutional mismanagement by the executives and the board, any shortcomings by the regulator, and recommendations to improve the safety and soundness of similarly situated institutions. This report must be made no later than 60 days after such a determination and again 180 days afterwards.
The Governmental Accountability Office (GAO) must report on additional factors in its report regarding such a determination. Specifically, GAO must report on any mismanagement by the executives and board of the institution, a review of the institution's compensation practices, supervisory or regulatory shortcomings, actions taken by regulators, and other relevant information. The bill also requires this report to be made no later than 60 days after such a determination and again 180 days afterwards.
