U.S. TREASURY DEPARTMENT 

OFFICE OF PUBLIC AFFAIRS

FOR IMMEDIATE RELEASE 4:30PM EDT: July 31, 2014

CONTACT: Treasury Public Affairs (202) 622-2960

FINANCIAL STABILITY OVERSIGHT COUNCIL MEETING JULY 31, 2014

WASHINGTON – Secretary Lew today convened a meeting of the Financial Stability Oversight 

Council (Council) in a closed session at the Treasury Department.

During the meeting, the Council discussed its ongoing assessment of potential industry-wide and firmspecific risks to U.S. financial stability arising from the asset management industry and its activities. 

The Council directed staff to undertake a more focused analysis of industry-wide products and activities 

to assess potential risks associated with the asset management industry. 

The Council also discussed the Securities and Exchange Commission’s (SEC’s) final rule on money 

market mutual fund (MMF) reform. The Council recognizes the SEC’s work to adopt a significant set 

of structural reforms of MMFs, in particular a floating net asset value (NAV) for institutional prime 

MMFs. These structural reforms, along with enhanced transparency and diversification requirements as 

well as strengthened rules for government MMFs, are intended to reduce the risks to financial stability 

posed by MMFs.

Since the financial crisis, MMFs have represented an unaddressed source of risk to the financial system. 

MMFs proved susceptible to destabilizing runs that necessitated extraordinary government support 

during the financial crisis. Since then, the Council has highlighted this risk and recommended that the 

SEC undertake structural reforms of MMFs. In 2012, the Council used its authority under Section 120 

of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to propose

specific recommendations to the SEC for reform. The SEC proposed reforms in 2013 and adopted them 

last week.

While not proceeding at this time to a final Section 120 recommendation, the Council intends to monitor 

the effectiveness of the SEC’s reforms in addressing risks to financial stability. In particular, the 

Council believes it will be important to better understand any unintended consequences of liquidity fees 

and gates, as well as the treatment of retail funds. After these measures have been implemented, the 
Council will report on the effects of these reforms and their broader implications for financial stability.

During the meeting, the Council continued its discussion of nonbank financial company designations 

under section 113 of the Dodd-Frank Act. Consistent with the Council’s rule and guidance, the Council 

will not name any company under review in this process until a final designation has been made. This 

discussion also included an annual review of two nonbank financial companies designated in July of 

2013, American International Group, Inc., and General Electric Capital Corporation. The Council did 

not rescind either company’s designation.

Finally, the Council also voted to approve the minutes of its previous meeting on June 24.

Additional information regarding the Council, its work, and the recently approved meeting minutes is 

available at www.fsoc.gov.

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