GOP senator tells Geithner to go slow on 'systemically important' firms

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The FSOC was created by the Dodd-Frank reform law as a place to gather top financial regulators together and charge them with overseeing the overall stability of the financial system. One of the key new powers handed to that panel is the ability to identify what financial institutions qualify as vital to the financial system, and therefore merit heightened regulations and oversight.

The FSOC has been working on identifying these firms, and has established criteria that would tag some of the nation's largest banks, as well as some of the most integral intermediaries of the financial system, as systemically significant.

However, the FSOC also has the power to identify nonbank financial institutions as significant, and Vitter said in his letter the group should hold off on doing so until it finalizes what rules would exempt such institutions from the label.

"Designating firms without having finalized all of the rules, given the material nature of even a preliminary designation, and the attendant disclosure requirements of federal securities law, would be ill-advised and would create a level of unfairness to designate firms from which it would be impossible to recover," he wrote.

He also chided the FSOC for holding brief public meetings largely filled with formalities before doing most of its work behind closed doors.

Instead, the Senate Banking Committee member contended the FSOC should avoid identifying nonbanks as significant until all the relevant rules are completed — if they are to identify any firms at all.