WASHINGTON–The GAO has again issued a report that calls for consolidation among financial regulatory agencies.
The report is similar to recommendations GAO made three years ago; no action has been taken on those recommendations.
The GAO’s report, “Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas,” includes a section titled “Modernizing the U.S. Financial Regulatory System” – contained in the report on “Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas” in which it states Congress should consider whether additional changes to the financial regulatory structure could be made to reduce or better manage “fragmentation and overlap “in the regulation of financial institutions.
“For example, Congress could consider consolidating the number of federal agencies involved in overseeing the safety and soundness of depository institutions, combining the entities involved in overseeing the securities and derivatives markets, and determining the optimal federal role in insurance regulation, among other considerations,” the GAO report states.
The independent agency said changes could help improve the efficiency and effectiveness of oversight; the consistency of consumer and investor protections; and the consistency of financial oversight for similar institutions, products, risks, and services.
The report also recommends considering changes in the law to align the Financial Stability Oversight Council’s authorities with its mission to respond to systematic risks. “Congress could do so by making changes to FSOC’s mission, its authorities, or both, or to the missions and authorities of one or more of the FSOC member agencies to support a stronger link between the responsibility and capacity to respond to systemic risks,” the report states.