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Minutes of the Financial Stability Oversight Council 

Held February 28, 2013 

PRESENT: 

Jacob J. Lew, Secretary of the Treasury and Chairperson of the Financial Stability 

Oversight Council (Council) 

Ben Bernanke, Chairman, Board of Governors of the Federal Reserve System (Federal Reserve) 

Martin J. Gruenberg, Chairperson, Federal Deposit Insurance Corporation (FDIC) 

Elisse Walter, Chairman, Securities and Exchange Commission (SEC) 

Gary Gensler, Chairman, Commodity Futures Trading Commission (CFTC) 

Richard Cordray, Director, Consumer Financial Protection Bureau (CFPB) 

Edward DeMarco, Acting Director, Federal Housing Finance Agency (FHFA) 

Debbie Matz, Chairman, National Credit Union Administration (NCUA) 

Thomas J. Curry, Comptroller of the Currency, Office of the Comptroller of the Currency (OCC) 

Roy Woodall, Independent Member with Insurance Expertise 

Richard Berner, Director, Office of Financial Research, Department of the Treasury (non-voting 

member) 

Michael McRaith, Director, Federal Insurance Office, Department of the Treasury (non-voting 

member) 

John P. Ducrest, Commissioner, Louisiana Office of Financial Institutions (non-voting member) 

John Huff, Director, Missouri Department of Insurance, Financial Institutions, and Professional 

Registration (non-voting member) 

David Massey, Deputy Securities Administrator, North Carolina Department of the Secretary of 

State, Securities Division (non-voting member) 

GUESTS: 

Department of the Treasury 

Neal S. Wolin, Deputy Secretary 

Mary J. Miller, Under Secretary for Domestic Finance 

Amias Gerety, Deputy Assistant Secretary for FSOC 

Christopher J. Meade, Acting General Counsel 

Board of Governors of the Federal Reserve System 

Daniel K. Tarullo, Governor 

Nellie Liang, Director, Office of Financial Stability Policy and Research 

Federal Deposit Insurance Corporation 

Jason Cave, Deputy Director for Complex Financial Institutions Monitoring 

Securities and Exchange Commission 

Sara Cortes, Counsel to the Chairman 

Commodity Futures Trading Commission 

Dan Berkovitz, General Counsel 
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Consumer Financial Protection Bureau 

Ashwin Vasan, Senior Advisor

Federal Housing Finance Agency 

Mario Ugoletti, Special Advisor to the Director 

National Credit Union Administration 

John Worth, Chief Economist 

Office of the Comptroller of the Currency 

John Lyons, Senior Deputy Comptroller and Chief National Bank Examiner 

Office of the Independent Member with Insurance Expertise 

Chris Ledoux, Senior Advisor 

Federal Reserve Bank of New York 

William Dudley, President and Chief Executive Officer (participating by phone) 

Office of Financial Research 

Matthew Reed, Chief Counsel 

Federal Insurance Office 

John Nolan, Senior Policy Advisor 

Louisiana Office of Financial Institutions 

Mike Stevens, Senior Executive Vice President, Conference of State Bank Supervisors 

Missouri Department of Insurance, Financial Institutions, and Professional Registration 

Mark Sagat, Counsel and Manager, Financial Policy and Legislation, National Association of 

Insurance Commissioners 

North Carolina Department of the Secretary of the State, Securities Division 

Joseph Brady, General Counsel, North American Securities Administrators Association 

PRESENTERS: 

Macro-environment Overview: Fixed Income Asset Valuation 

• Tobias Adrian, Vice President and Function Head, Capital Markets Function, 

Federal Reserve Bank of New York 

• Trent Reasons, Senior Policy Advisor, Treasury 

• Nellie Liang, Director, Office of Financial Stability Policy and Research, Federal 

Reserve 
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The Council’s Annual Report 

• Tobias Adrian, Vice President and Function Head, Capital Markets Function, 

Federal Reserve Bank of New York 

• Trent Reasons, Senior Policy Advisor, Treasury 

Nonbank Financial Company Designations Stage 3 Analysis Update 

• Maria Perozek, Senior Economist, Federal Reserve 

• Jose Berrospide, Economist, Federal Reserve 

• George Sacco, Senior Analyst, FHFA 

• John Nolan, Senior Advisor, Federal Insurance Office, Treasury 

• Todd Cohen, Policy Advisor, Treasury 

• Diane Fraser, Senior Policy Advisor, Office of the Independent Member 

• Patrick Pinschmidt, Executive Director of the Council, Treasury 

Money Market Mutual Fund Reform Update 

• Elisse Walter, Chairman, SEC 

• Matt Rutherford, Assistant Secretary for Financial Markets, Treasury 

• Eric Froman, Deputy Assistant General Counsel for FSOC, Treasury 

• Craig Lewis, Chief Economist and Director of the Division of Risk, Strategy, and 

Financial Innovation, SEC 

Executive Session 

The Chairperson called the executive session of the meeting of the Financial Stability Oversight 

Council to order at approximately 1:10 P.M. (EST). He began by welcoming everyone to the 

meeting and noting the critical role played by the Council in enhancing coordination among 

regulators and moving financial reform implementation forward. He added that the Council had 

made significant progress in promoting market stability, including by taking actions to identify 

risks and increase oversight, and that he was looking forward to working with the members of 

the Council to continue this progress. 

The Chairperson then outlined the meeting agenda, which had been previously distributed to the 

members together with copies of the resolution and other materials. The agenda for the meeting 

included the following subjects: (1) an update on fixed income asset valuation; (2) the Council’s 

annual report; (3) an update on nonbank financial company designations stage 3 analysis; (4) an 

update on money market mutual fund reform; and (5) consideration of, and a vote on, a 

resolution approving the minutes of the Council’s meeting on January 31, 2013. 

1. Macro-environment Overview: Fixed Income Asset Valuation 

The Chairperson turned to the first agenda item regarding fixed income asset valuation and 

called on Tobias Adrian, Vice President and Function Head, Capital Markets Function at the 

Federal Reserve Bank of New York; Trent Reasons, Senior Policy Advisor at Treasury; and 

Nellie Liang, Director of the Office of Financial Stability Policy and Research at the Federal 

Reserve, to give the presentation. The presenters discussed the current environment of low 

Treasury and corporate bond yields and low interest rates and their financial stability 
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implications. After the presentation, members of the Council asked questions and had a 

discussion. 

2. The Council’s Annual Report 

The Chairperson then introduced the agenda item regarding an update on the Council’s 2013 

annual report and asked Tobias Adrian, Vice President and Function Head, Capital Markets 

Function at the Federal Reserve Bank of New York, and Trent Reasons, Senior Policy Advisor at 

Treasury, to give the presentation. Mr. Adrian and Mr. Reasons stated that the Council’s 2013 

annual report is currently under development and that there has been broad collaboration by the 

staffs of all Council members and member agencies. They also outlined the proposed timeline 

for preparation of the report, as well as some proposed recommendations, emerging threats, and 

other topics to be included in the report. After the presentation, members of the Council asked 

questions and had a discussion. 

3. Nonbank Financial Company Designations Stage 3 Analysis Update 

The Chairperson next addressed the agenda item regarding an update on the ongoing analysis of 

a subset of nonbank financial companies that the Council previously had advanced to stage 3 of 

the designations process. He asked Maria Perozek, Senior Economist at Federal Reserve; Jose 

Berrospide, Economist at the Federal Reserve; and George Sacco, Senior Analyst at the FHFA, 

to give the presentations. John Nolan, Senior Advisor in the Federal Insurance Office at 

Treasury; Todd Cohen, Policy Advisor at Treasury; Diane Fraser, Senior Policy Advisor in the 

Office of the Independent Member; and Patrick Pinschmidt, Executive Director of the Council at 

Treasury, were available to answer questions. After the presentations, members of the Council 

asked questions and had a discussion. 

4. Money Market Mutual Fund Reform Update 

The Chairperson then asked Elisse Walter, Chairman of the SEC, to provide an update on money 

market mutual fund (MMF) reform. Matt Rutherford, Assistant Secretary for Financial Markets 

at Treasury; Eric Froman, Deputy Assistant General Counsel for FSOC at Treasury; and Craig 

Lewis, Chief Economist and Director of the Division of Risk, Strategy, and Financial Innovation 

at the SEC, also participated in the presentation. Pursuant to the authority under Section 120 of 

the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Council published 

proposed recommendations regarding MMF reform in the Federal Register for public comment 

on November 19, 2012. The comment period for the proposed recommendations closed on 

February 15, 2013. Chairman Walter discussed the SEC staff’s November 2012 study relating to 

the impact of the SEC’s 2010 MMF reforms and further work regarding MMF reform. Mr. 

Rutherford and Mr. Froman provided an overview of the approximately 150 comments received 

on the Council’s proposed recommendations. Mr. Lewis provided further detail on the SEC staff 

study. After the presentation, members of the Council asked questions and had a discussion. 
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5. Resolution Approving the Minutes of the Meeting held on January 31, 2013 

“BE IT RESOLVED, by the Financial Stability Oversight Council (the “Council”), that the 

minutes attached hereto of the meeting held on January 31, 2013 of the Council are hereby 

approved.” 

The Chairperson asked for a motion to approve the resolution, which was made and seconded. 

The Council approved the resolution by unanimous vote. 

The Chairperson asked for a motion to adjourn the meeting, and the Council voted to adjourn. 

The Chairperson adjourned the meeting at approximately 3:01 P.M. (EST).