Fed Moves to Label 'Systemically Important' Nonbank Firms

(New York Times) - WASHINGTON—The Federal Reserve unveiled a rule defining two crucial terms that U.S. regulators will use to determine which financial firms, other than banks, are so risky they warrant tougher scrutiny and regulation.
The Dodd-Frank financial-overhaul law granted top regulators the power to designate financial firms as "systemically important," a label that would place the firm under Fed supervision and subject it to additional capital and liquidity requirements.
The provision is a central part of policy makers' effort to address the problems laid bare by the financial crisis. A number of firms at the epicenter of the crisis—such as American International Group Inc.—were subject to uneven or absent regulation, particularly large financial companies that didn't fit the traditional definition of a bank.

Read Entire Article
http://online.wsj.com/article/SB10001424052748704364004576132142508846126.html?mod=dist_smartbrief