Madam Secretary, I want to thank you as Chair of the Financial Stability Oversight Council (FSOC or Council), and the entire FSOC Secretariat for all of their tremendous work in preparation for today’s meeting.  Of the Congressional authorities the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) created in response to the 2008 Financial Crisis, designation authority by this Council is one of the most critical and responsive to the exposed vulnerabilities. 

Given the vigorous debate among Council members on this matter, I support the revised Interpretive Guidance and Analytical Framework.  With these revisions, I believe the Council must use this authority with care, and with a clear awareness of its impacts.  The authority to designate nonbank financial companies for Federal Reserve supervision fills a regulatory gap of such magnitude that we are bound, as a Council, to be very specific in reaching conclusions when exercising this important, and powerful tool. 

Like the healthy debate and exchange of ideas that brought us here today, we must proceed in any initiation of a designation with a surgical focus on thorough analyses and review of available data--all with the goal of ensuring financial stability.  The Council members should work closely and in unison towards any determination. 

Similarly, I want to thank and applaud the Council for re-invigorating the Financial Market Utility (FMU) sub-committee.  In addition to the non-bank designation authority, Dodd-Frank authorized the Council to designate a Financial Market Utility as “systemically important” under certain conditions.  I have long been an advocate of utilizing this authority given the importance of Financial Market Utilities to the proper functioning of our financial markets, and I encourage the Council to continue to take seriously our responsibility with respect to Financial Market Utility designation.[1]  I look forward to working with my colleagues on the Council in the prudent exercise of these authorities in both the non-bank and Financial Market Utility space.  Thank you.