WASHINGTON Aug 20 A heavyweight coalition of
asset managers demanded a greater say in future decisions by the
top U.S. risk council that would subject them to tougher
regulation, the groups said in a letter to the U.S. Treasury.
The groups asked that the Financial Stability Oversight
Council (FSOC) change its rules by which it designates firms as
"systemically important", a tag that subjects them to far
tougher capital and risk management requirements.
The Treasury did not have an immediate comment.
Asset managers and insurance firms have been fighting the
designations, saying it does not make sense to subject them to
the same capital standards as the large Wall Street banks that
were at the heart of the 2007-09 financial crisis.
In their petition, the groups said that FSOC's process by
which it designates firms is opaque, asking the council - which
is chaired by Treasury Secretary Jack Lew - to allow companies
and their primary regulators to give more input.
At a meeting in July, FSOC said it was launching a review of
risks in the asset management industry, but a source familiar
with the council said it was unlikely to designate any firms as
Instead, the review would focus on 'industry-wide products
FSOC is considering whether to add insurance firm Metlife
to a handful of other non-banks it has already
identified as systemically important, but an expected vote on
MetLife did not take place at the July meeting.
The other non-banks that have been designated are GE Capital
, and insurance firms Prudential Financial Inc and
American International Group.
The industry groups that signed the letter, which was dated
Aug. 19, were the American Council of Life Insurers, the
American Financial Services Association, the Association of
Institutional Investors, the Financial Services Roundtable and
the asset management group of the Securities Industry and
Financial Markets Association.
(Reporting by Douwe Miedema; Editing by Bernard Orr)