the FDIC’s plan to increase oversight of large asset managers. McKernan seeks to give the FDIC power to supervise large fund managers’ investment choices once they approach a certain ownership threshold to ensure they do not have undue influence on banks and the economy, a process the Fed already regulates.
First, the FDIC’s proposal would create redundancy in bank ownership supervision, possibly leading to confusion and inconsistency in regulatory enforcement. The Bank Holding Company Act designates the Fed as the primary regulator for bank holding companies and details its role in reviewing any control and influence companies have over bank operations and management.
Second, there is an existing precedent set by the Fed regarding the conditions asset managers must meet to operate above the 10% ownership threshold. These requirements were explained to Vanguard by the Federal Reserve Board’s general counsel in Third, if the concern is that asset managers are not remaining passive in their investments, alternative solutions such as modifying voting structures, having asset managers relinquish voting rights, or allowing individual investors to retain voting rights could be explored rather than added regulation. In fact, over the past two years,
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