Financial Stability Oversight Council To Meet in October

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For the first time, all the heads of the most significant U.S. financial regulators will meet in an official capacity to discuss the stability of the economy. The Financial Stability Oversight Council will convene on October 1st, according to a press release from the Treasury on Thursday. The new group was created as part of this summer's massive financial regulation bill. Will it help?

Here's who will likely be in attendance

  • Tim Geithner, Treasury Secretary (Chairperson of the Financial Stability Oversight Council)
  • Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System
  • John Walsh, Acting Comptroller of the Currency
  • Mary Schapiro, Chairman of the U.S. Securities and Exchange Commission
  • Sheila Bair, Chairman of the Federal Deposit Insurance Corporation
  • Gary Gensler, Chairman of the Commodity Futures Trading Commission
  • Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency
  • Debbie Matz, Chairman of the National Credit Union Administration
  • John M. Huff, Director, Missouri Department of Insurance, Financial Institutions, and Professional Registration (non-voting member)
  • William S. Haraf, Commissioner, California Department of Financial Institutions (non-voting member)
  • David S. Massey, Deputy Securities Administrator, North Carolina Department of the Secretary of State, Securities Division (non-voting member)

As you can see, it's an all-star lineup. The purpose of the body is to discuss what's going on in the markets and proactively solve potential problems. Some people have asserted that if a group of regulators like this had met regularly, then the financial crisis would have never occurred. Their sharing of information could have made the sum of their knowledge greater than its parts. For example, since the insurance watchdogs might not have been fully aware of the growth of the credit-default swaps in the derivatives market, they couldn't have seen the storm coming -- and they may have best understood the risks.

Whether the group is just a good idea or something that will actually work remains unclear. Financial crises will likely continue to elude regulators, but perhaps by talking more and sharing information the group can at least soften crises' severity. If nothing else, it's hard to see how the new council could hurt -- it might just be a little naïve to assume that it's a sort of Justice League of hero regulators that will protect the U.S. from any and all financial failures in the future.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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