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Treasury’s Mary Miller: No Decision on Designation of Asset Managers

The FSOC held its conference on the Asset Management Industry on Monday, May 19.  In her opening remarks at the conference, Treasury Under Secretary for Domestic Finance, Mary Miller, who is also a veteran of the asset management industry, discussed the FSOC’s commitment to studying risks present in the financial system.  She went on to say that the FSOC was gathering data on the asset management industry because the Council would be “derelict” if it failed to consider the risks posed by an entire segment of the financial industry.

In her remarks, Under Secretary Miller assured the industry that the FSOC “is working to determine what, if any, risks exist in the asset management industry, before we consider what, if any, action the Council should take in this area.  Our work to assess these risks is ongoing, and it will be based on a thorough analysis of information from a wide array of sources.”  Contradicting the views of many industry participants, she stated that the FSOC had not yet decided what, if any, action it would take with respect to the asset management industry.  Should the FSOC decide that the asset management industry or its activities pose a system threat, Under Secretary Miller laid out the FSOC’s options which include:

  • Highlighting potential emerging threats in its annual report to Congress (the FSOC mentioned money market funds and securities lending in its most recent annual report)
  • Making recommendations to primary regulators for heightened standards and safeguards (the option pursued by the FSOC with respect to money market funds) and
  • Designating specific firms as SIFIs.

She emphasized that the Conference was only one part of the FSOC’s efforts to better understand the asset management industry and what, if any, risks it might pose to financial stability.