Industry Groups
Industry groups, including the Investment Company Institute, which lobbies for the mutual fund industry, and the Managed Funds Association, representing hedge funds, have pressed regulators to avoid being designated systemically important.
In addition to releasing preliminary rules for designating clearinghouses, the FSOC has conducted studies on the Volcker rule, which restricts banks from trading solely for their own profit; and concentration limits, or market-share size of the largest banks.
The FSOC's work on systemic risk shouldn't be done too quickly because it must be thorough, said Kim Olson, a principal at Deloitte & Touche LLP.
"The idea is to get it right," she said. "There are different things that can make you systemic, so how do you capture that and capture that in a balanced manner? These definitions, these concepts, don't come in precisely formed definitions."
Data Collection
The financial research office, set up to help the FSOC decide on systemic-risk designations, risks duplicating data- collection efforts at other regulators.
The Fed created the Large Institution Supervision Coordinating Committee last year to support the central bank in its systemic research, and the Federal Deposit Insurance Corp. formed the Committee on Systemic Resolutions to advise it on the systemic activities of banks.
The Office of Financial Research has been "way too slow," said Allan Mendelowitz, a former regulator of the Federal Home Loan Banks and one of the original creators of the idea for a research division. The Treasury, which houses the office, is "ambivalent" because it doesn't want the office contradicting its own views, he said.
Acting Leaders
FSOC is also tackling the issues with only half of the 10 voting members having been confirmed to their jobs. The FDIC, the Office of Comptroller of the Currency and the Federal Housing Finance Agency all have acting leaders that have yet to be approved by the Senate.
Former Ohio Attorney General Richard Cordray, introduced today as Obama's pick to lead the Consumer Financial Protection Bureau, will also need Senate confirmation. Retired Treasury official Roy Woodall is awaiting confirmation for an FSOC seat designated for an insurance specialist.