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The industry’s effort moves to Capitol Hill, one day after a hearing at the US Treasury, where hedge fund manager Ken Griffin told a regulator from the Bank of England that she was mistaking normal capital market volatility for systemic risk. Industry lobbyists highlighted moves by the international Financial Stability Board that they say could affect the industry’s ability to get a fair hearing from US regulators, some of whom sit on the FSB.
Some members of Congress, who are worried that the FSB process has targeted only US firms for potential new rules, are latching on to those nationalist sentiments. Six members of the House financial services committee, including chairman Jeb Hensarling, recently sent a letter to US regulators saying the FSB is not accountable to the American people. "The last thing we should do is surrender US sovereignty on financial regulatory matters to an international ‘old boy’s club’ that deliberates in secret", the letter said.
The committee will hold a hearing on what the title of the event calls the "dangers" of designating large managers as systemically important. The US Financial Stability Oversight Council has begun its own review which may lead to such designations for firms including BlackRock and Fidelity, or for their biggest mutual funds.
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