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US Officials Decide Which Nonbanks To Term Threats

Monday, June 3, 2013 - 5:37 PM
From The Associated Press via Yahoo Finance:
Federal regulators have proposed a group of firms that aren't banks to be deemed potential threats to the financial system that need stricter government oversight.

The regulators didn't name the firms or say how many it wants to designate as so big and interconnected that their potential troubles could imperil the financial system.

The Financial Stability Oversight Council, which includes Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, acted Monday in a closed meeting. It was the most significant step by the council, which was created by the financial overhaul law to help prevent another meltdown.

Nonbank financial firms include insurers, hedge funds, mutual fund companies and private equity firms. Those deemed "systemically important" would have to increase their cushion against losses, limit their use of borrowed money and submit to inspections by Fed examiners.

 

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