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Your money manager doesn’t need tougher regulation 

June 24, 2014
Douglas M. Hodge, Market Watch

While the financial crisis is increasingly in the rearview mirror for many, policymakers in the U.S. and abroad continue to be — and rightfully so — preoccupied with preventing another systemic failure of the financial system.

This is especially true for the Financial Stability Oversight Council, or the “FSOC” , a creation of the Dodd-Frank Act, which is charged with the extraordinary task of identifying and taking action to reduce systemic risk. To this end, the FSOC has the authority to designate certain non-bank entities as “systemically important financial institutions,” or “SIFIs,” which are subject to prudential regulation, such as capital requirements and supervision by the Federal Reserve.

As stewards of retirement assets for millions of individuals and thousands of institutions, PIMCO’s business depends on well-functioning global capital markets and as a company we welcome the government’s focus on facilitating a more stable financial infrastructure. Yet the concern is that the FSOC — with its seemingly singular focus on SIFI designation of large entities, such as asset managers, and its associated opaque processes — is in fact drifting from its goal of reducing systemic risk.

Read More: MarketWatch

 
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