>> again as the chair i'm a member of fsoc as you know.i think it's extremely important factor and essentially if you are looking to what kinds of entities and why it may create systemic risk of these assets are not yours and not on a balance sheet that's a very different situation before you to assess in terms of whether such an entity if it were to fail, fails in any sense similar to a bank who does kerry positions on the balance sheet obviously. so i think it's a critical fact. not the only fact a look at but a critical distinction between asset managers and some of the other$1.35 billion in 2014. very, very significant growth by think definition. but despite this tremendous growth in resources, the s.e.c. -- and i acknowledge, this was prior to your time -- but it failed to detect ponzi schemes like madoff, stanford, didn't sound the warning on the collapse of the u.s. financial system, or near llapse. that describes for me a very serious problem within the sec. you may disagree with that and you may agree with that but i would like fo

someone mentioned the fsoc. i would just leave you with one of the concerns i hear from time to time that there are complex issues that are dealt with fsoc that would would argue, other regulators didn't have the expertise in those areas, so i just want to share that concern that you not reinvent the wheel and duplicate regulatory aspects. that is something we heard from time to time. thank you very much for being here today, working with us to reschedule this hiring, being here under less than ideal

one of the powers congress gave the fsoc was to designate. that doesn't say what that process should be, what the data should be before one does that. i think those are very important questions. i think it's also very important and actually the ofr study which came out in september about the asset management industry, not specific parties, pointed out that very fact that you mentioned, which is the asset manager business is an agency business. and so when you are considering what, if any, systemic risk it may or may not post, you're not talking about a balance sheet of positions. you're talking about an agency model. i think it's important that be understood by all who are considering this. and that's the right expertise be brought to bear on that analysis. >> in your analysis was the significance of the agency relationship? how do you personally or how do you at the acc as chair see this issue within your role at fsoc? >> again, as chair i am a member of fsoc as you know. i think eviction important factor. eventually if you're looking to wha

chair see this issue, within your role at fsoc? >> again, as the chair, i'm a member of fsoc, as you know. i think it is extremely important factor, essentially, if you're looking to what kinds of entities and why may create systemic risk, if these assets are not yours and not on your balance sheet, that's a very different situation before you to assess in terms of whether, you know, such an entity, if it were to fail, fails in any sense similarly to a bank. you know, i think it's a critical fact, not the only fact to look at, but a critical distinction between asset managers and some of the other entities that have been considered. >> thank you both. my time's expired. >> senator johans. >> chairman white, if i could turn to you. if you look at the history of the s.e.c. budget, even predating the obama administration, going back to the year 2000, the budget has grown from $377 million to $1.35 billion in 2014. very, very significant growth by think definition. but despite this tremendous growth in resources, the s.e.c. -- and i ac

chair see this issue, within your role at fsoc?> again, as the chair, i'm a member of fsoc, as you know. i think it is extremely important factor, essentially, if you're looking to what kinds of entities and why may create systemic risk, if these assets are not yours and not on your balance sheet, that's a very different situation before you to assess in terms of whether, you know, such an entity, if it were to fail, fails in any sense similarly to a bank. you know, i think it's a critical fact, not the only fact to look at, but a critical distinction between asset managers and some of the other entities that have been considered. >> thank you both. my time's expired. >> senator johans. >> chairman white, if i could turn to you. if you look at the history of the s.e.c. budget, even predating the obama administration, going back to the year 2000, the budget has grown from $377 million to $1.35 billion in 2014. very, very significant growth by think definition. but despite this tremendous growth in resources, the s.e.c. -- and i ackn

and if there are, what are the appropriate remedies and the fsoc has a whole menu of things it can do but no decisions have been made yet about whether there are risks that need broader oversight and what the steps will be. >> reporter: now the industry is fighting new regulation. it says asset managers and mutual fund companies are not banks and they did not cause the financial crisis. the investment company institute says, quote, a fund designated as a sifi will face significant additional regulatory costs, costs that will be, that will fall on shareholders. patti ann? >> peter barnes, fox business network live in washington. thanks. >> reporter: you bet. jon: there are key primary races around the country. coming up we'll preview some contests that could influence the balance of power on capitol hill. >>> plus a scary development in the mers outbreak. a third person testing positive for the disease here in the united states. we'll have a live report on that. >>> how would you feel about paying an extra $200 for a premium seat, not on an airliner but at your child's high school grad

with fsoc and the consumer protection bureau, particularly fsoc, is the idea that every time something emerges, new product line emerges or some new institution emerges, you cannot go back and pass legislation every year or two. we are talking about a global marketplace. we care deeply about this. someone is going to lead on these issues around the world and if we didn't, someone else would. i want to play by someone else's rules. the united states once the lead on this matter. we are getting some compatibility. it is a harmonization of rulemaking in the european market particularly as well as here. the idea of pursuing that pproach may tremendous sense to me as we went forward. so, again, my hope would be that what we have done was provide the ability to look over the horizon where you can watch product lines and respond to it in a timely fashion. is amazing it took legislation to create it. it should have been occurring naturally. we had regulators meeting up periodically with each other and talking about what was occurring. it did become the crisis of september 2008. consumer protec

i wanted to ask you about according to reports, fsoc is considering designating asset managers assistedmedically important financial institutio institutions. and as i understand, two companies have already advanced to stage two of the designation process. and what i would like to understand is that, i believe that asset management of a banking is completely different, or in many ways very different and that the risks are different. i guess i would ask you, do you agree that asset management and banking are different? and can you help me understand also as i understand it the designation of asset managers assisted medical important financial institutions that the fsoc council announced it will hold a public forum on asset management but they've already moved to companies to stage two so seems like the card got before the horse. so if you can help me understand that as well. .. of the firms that they are looking into and considering for designation. there is no 1-size-fits-all in terms of analysis and what they are looking to see is is there some way in which the distress of a particular

>> well, the fsoc is going through some organizations. the o.f.r. recently put out an accord as it relates to asset management entities that signals some concern. we have some signality of the o.f.r. report. if you -- you know, look. we have asset managers whose firms could fail, but that doesn't necessarily mean the unds would fail. funds and proceeds would move elsewhere. you could have an extremely large s&p 500 index fund that would be enormous in size but not necessarily risky or ifficult or complex to manage. members continue -- try to think of asset managers in a world of systematic managers and decision making, that's going to take some additional decision making. we are hopeful there will be g.s.e. reform. there has been some work in the congress. there has been some momentum. we are hopeful they might even act on this year. there is work to be done on that front. clearly maintaining fanny and freddie in a conserve toreship -- conservatorship is the least best option. >> tom? >> i feel we should be cautious adding to the list of siffy desig

there's a study done by the ofr, which is part of fsoc to look at whether asset managers with importantand congress was holding a hearing to talk about the whole process. when we look at the systemically important designation, there's a huge difference in business models between what banks do and what mutual fund companies do. you know, banks are principals and they're highly leveraged, typically 10 to 1 for a large bank. and, you know, they're acting on their own behalf. we, on the other hand, are really agents, if you think about it. all we're doing is managing money on behalf of our clients. it's not our money, it's our clients' money. so applying bank-like regulation to that model does not make a lot of sense to us. >> what would it mean if that -- if that study causes you to be pulled into that? would there be a tax on you? would you have to pay into a fund? >> part of the problem is nobody knows what the remedies would be under the designation, but one presumes that under dodd-frank there might be requirements around capital, additional fees to pay for the regulation, and all of t

the fsoc is holding a public conference this morning on the issue of regulating asset management aheaday. joining us is mary miller, the undersecretary for domestic finance at the u.s. department of treasury. good morning to you. let's just talk about this. when you think about asset managers, they sort of weather the crisis pretty well. the question is, do you think they should be, or at least some of them should be? >> i think it's the job to monitor the entire financial landscape. we have to look at everything and see if there are any risks that deserve more oversight. >> what component are you looking at most? >> three things i will try to cover in the public conference. how do they monitor things like liquidity, redemption risks. how do they look at risks internally. secondly, we're asking a group of panelists talking about risk that may be posed by asset managers. we are asking a broad list of questions around that. and finally, we're asking some pretty specific questions about operational risks inside of firms. if you have to wind down a portfolio. if you have to liquidate asset