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Annual Report of the Council of Inspectors General on Financial Oversight

August 19, 2011 Comments off

Annual Report of the Council of Inspectors General on Financial Oversight (PDF)
Source: Council of Inspectors General on Financial Oversight

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, creating the Council of Inspectors General on Financial Oversight (CIGFO). The Council, which includes the Inspectors General of nine major government financial entities, was established to facilitate information sharing among the IG members, provide a forum for discussion of IG member work as it relates to the broader financial sector, and evaluate the effectiveness and internal operations of the Financial Stability Oversight Council (FSOC). Chaired by Treasury Secretary Tim Geithner, the FSOC, also created by the DoddFrank Act, is charged with identifying threats to the financial stability of the country, promoting market discipline and responding to emerging risks to the stability of the nation’s financial system.

During this first year, both the CIGFO and the FSOC have primarily focused on standing up their respective organizations and developing procedures for conducting business. At the invitation of Chairman Geithner, I attended the FSOC meeting on March 27, 2011, to discuss the CIGFO’s oversight role. In addition, I have received regular briefings on FSOC’s activities to date.

As FSOC transitions during the next year from a start up to a fully functioning organization, CIGFO will also transition as we fulfill our statutory role of overseeing their work. We expect to establish one or more working groups to conduct audits of FSOC’s work, including their process for designating systemically important financial institutions for heightened prudential supervision. As warranted, we would also expect to conduct necessary criminal investigations.

This first CIGFO Annual Report includes a discussion of current and pending joint projects of CIGFO members and an overview of FSOC’s compliance with statutory requirements. We find that FSOC has either met or is on target to meet all requirements to date. In addition, our report includes sections, developed by each IG and under his or her exclusive editorial control, that establish a baseline of oversight activity conducted by each IG from the beginning of the current financial crisis through July 14, 2011.

Going forward, we believe that the CIGFO will play a significant role in reviewing FSOC’s adherence to the policies and regulations that are currently being put in place and better enable FSOC to meet their goal of comprehensive monitoring to ensure the stability of our nation’s financial system.

Categories: business and economics, Council of Inspectors General on Financial Oversight, governance, government and politics
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