Treasury Hires Staff Chief for Wall Street Risk Council, Sources SayBy and
Bimal Patel takes key FSOC role flagging risks, designations
Banking lawyer had served as senior adviser to FDIC’s Norton
The Trump administration has hired a banking lawyer for a key position with a panel whose work monitoring for financial-industry perils has been assailed by Republicans, according to people familiar with the move.
Bimal Patel has joined the staff of the Financial Stability Oversight Council to run day-to-day operations for the panel created by the Dodd-Frank Act, said two people who requested anonymity because the hiring hasn’t been announced. The new Treasury deputy assistant secretary previously led the financial-regulation practice at O’Melveny & Myers and was a senior adviser to former Federal Deposit Insurance Corp. board member Jeremiah Norton.
Patel, who started work with the staff of about a dozen this week, fills a job that has been influential in FSOC’s role flagging risks to the financial system and its work reviewing nonbank firms labeled as systemically important.
The staff has been led in recent months by Eric Froman, an Obama administration holdover who was heavily involved in the designation process, including the naming of MetLife Inc. as systemically important. That label was overturned by a court decision that the Treasury Department has appealed.
Last month, President Donald Trump assigned Treasury Secretary Steven Mnuchin to conduct a “thorough review” into how the FSOC decides which companies warrant designation as systemically important, a status that brings extra regulation and scrutiny. The president’s memo directed Mnuchin to make sure the council’s process is “sufficiently transparent” and gives companies a chance to push back.
An agenda for the panel’s next meeting May 8 says the regulators will discuss that review, and they will also talk about Trump’s executive order in February that called for rethinking all U.S. financial regulations.
FSOC was created by Dodd-Frank as a way to help regulators guard against threats to the broader economy and identify non-bank financial companies that could pose systemic risk. The panel, which is chaired by the Treasury secretary, includes the heads of the Federal Reserve, Securities and Exchange Commission, Federal Deposit Insurance Corp. and other financial agencies.
Though the panel’s high-level decisions are made by 10 voting members, much of the work is done by the regulators’ deputies and the council’s own staff. Patrick Pinschmidt, another recent deputy assistant secretary who ran the council staff, said in speeches that his role was to oversee the FSOC office, lead collaborations among agency deputies and help the Treasury secretary with the council’s work.
A Treasury spokeswoman declined to comment on Patel’s new role.