Don't Regulate Asset Managers as If They Were Banks

Mon Dec 16 15:24:38 EST 2013
By Dr. Sharon Brown-Hruska et al.

In this letter to the editor of the Wall Street Journal, NERA Vice President Dr. Sharon Brown-Hruska, who served as a Commissioner at the US Commodity Futures Trading Commission between 2002 and 2006, joined 15 other former senior US regulators in warning the federal government against applying bank regulation to asset managers. They note that a recent report on "Asset Management and Financial Stability" by the Office of Financial Research could undermine market vibrancy by its thinly veiled suggestion that the Financial Stability Oversight Council (FSOC) may restrict asset managers' pursuit of investment strategies on behalf of their investors by subjecting these managers to bank regulation. They criticize FSOC's "opaque processes" and "lack of accountability and transparency," and urge an open dialogue to address any specific concerns FSOC may have about asset managers that may warrant a regulatory response.

The letter was written by NERA Vice President Sharon Brown-Hruska; former SEC Chairman Roderick M. Hills; former FDIC Chairman William M. Isaac; former SEC Chairman Richard C. Breeden; SEC Chairman Harvey L. Pitt; former FDIC Chairman Donald Powell; former CFTC Chairman James E. Newsome; former Undersecretary of Treasury for Domestic Finance Randal K. Quarles; former SEC Commissioner Christopher Cox; former SEC Commissioner Richard Y. Roberts; former SEC Commissioner Laura S. Unger; former SEC Commissioner Paul S. Atkins; former SEC Commissioner Roel C. Campos; former CFTC Commissioner Frederick W. Hatfield; and former CFTC Commissioner Jill E. Sommers.