On Friday, April 21st, the Financial Stability Oversight Council (FSOC) voted unanimously to bring two new frameworks to public comment. The first of these would offer more transparency as to how the council assesses potential risks to financial stability, while the other concerns the tightening of the rules for nonbank entities like hedge funds and cryptocurrency firms.

FSOC Proposes New Rules For Assessing Financial Stability Risks, Overseeing Nonbank Entities

This Friday, the Financial Stability Oversight Council (FSOC)  voted unanimously to issue for public comment a new framework that is intended to facilitate increased transparency on how the organization assesses risks to financial stability. The proposal comes a month after FSOC was called to an unscheduled meeting due to the March banking crisis.

The framework would also entail risks stemming from the activities of various firms. The Council also voted to similarly issue a framework that would tighten the rules for designating nonbank entities for Federal Reserve supervision. These entities are companies that offer certain financial services that are not registered as banks and include various hedge funds, cryptocurrency firms, and other similar ventures.

Today’s proposals are important to ensuring the Council has a rigorous approach to identify, assess, and address risks to our financial system. The Council remains committed to public transparency regarding its work, and today’s proposals would make us better equipped to handle risks to the financial system, whether they come from activities or firms.

Janet Yellen, Secretary of the Treasury

Generally, the proposed rules are intended to help FSOC better fulfill its role in preserving financial stability in the United States in the face of various modern threats. Notably, they could, through their focus on nonbank entities, bring cryptocurrency companies under closer supervision by the Federal Reserve.

Did Crypto Cause the Banking Crisis?

Digital Assets were very much discussed throughout the March banking crisis as two of the closed banks were noted for being some of the largest such crypto-friendly entities. Much of the speculation centered on whether the collapses were caused by reckless exposure to cryptocurrencies, or even whether the specific banks were targeted as part of the larger assault on the industry.

Another reason why cryptocurrencies were at the forefront of the discussion is the fact that the first of the three banks to fail—Silvergate Bank—received its mortal blow due to exposure to digital assets. The damage, however, was not the result of cryptocurrencies themselves, but rather due to its ties close ties to FTX, a company that catastrophically collapse last November due to what can best be described, according to the currently available information, gross incompetence and large-scale fraud.

Despite the speculation, regulators themselves came out and denied that digital assets were the cause of the crisis. Signature Bank, the one whose closing was the most hotly debated, was allegedly closed not due to exposure to cryptocurrencies, but due to a lack of confidence in its management that the watchdogs had. More recently, NYDFS’s Superintendent Adrienne Harris explicitly stated that Signature’s crypto clients didn’t play a disproportionate role in the downfall and that the bank had a “healthy proportion of crypto customers”.

This article originally appeared on The Tokenist

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