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Economy
In reply to the discussion: STOCK MARKET WATCH -- Thursday, 5 April 2012 [View all]Demeter
(85,373 posts)30. Financial risk council readies systemic tag THIS IS RICH
http://www.reuters.com/article/2012/04/03/us-financial-regulation-sifi-idUSBRE83211A20120403
....Large insurers, hedge funds and other financial firms are hoping to avoid the systemic designation and have been trying to convince regulators to leave them alone. BlackRock Inc (BLK.N), General Electric's (GE.N) GE Capital unit and MetLife Inc (MET.N) are among the companies that have written to regulators trying to avoid making the list.
The final rule was approved at a public meeting by the Financial Stability Oversight Council (FSOC), headed by the Treasury secretary and counts all the major financial regulators among its members. The rule lays out broad measures the council will use to decide which companies should be given a once over but it does not significantly narrow the field of who could be picked, something that will ensure anxiety levels will remain high among executives at firms worried they will be designated. The ability to keep a closer eye on financial giants other than banks is a major aspect of the 2010 Dodd-Frank reform law and is supposed to prevent the chaos that occurred after the government was caught flat-footed in late 2008 when insurer American International Group Inc (AIG.N) ran into trouble. Ultimately the government rescued AIG with $182 billion in government funds. Fed oversight could be costly for companies as it involves maintaining higher capital reserves, having a plan for liquidation in the event of a failure and other regulatory requirements laid out in the law.
Companies trying to avoid the systemic designation have also expressed concerns about how a bank regulator such as the Fed would oversee industries outside its area of expertise. Under Dodd-Frank, banks with more than $50 billion in assets are automatically subject to greater scrutiny by the Fed.
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....Large insurers, hedge funds and other financial firms are hoping to avoid the systemic designation and have been trying to convince regulators to leave them alone. BlackRock Inc (BLK.N), General Electric's (GE.N) GE Capital unit and MetLife Inc (MET.N) are among the companies that have written to regulators trying to avoid making the list.
The final rule was approved at a public meeting by the Financial Stability Oversight Council (FSOC), headed by the Treasury secretary and counts all the major financial regulators among its members. The rule lays out broad measures the council will use to decide which companies should be given a once over but it does not significantly narrow the field of who could be picked, something that will ensure anxiety levels will remain high among executives at firms worried they will be designated. The ability to keep a closer eye on financial giants other than banks is a major aspect of the 2010 Dodd-Frank reform law and is supposed to prevent the chaos that occurred after the government was caught flat-footed in late 2008 when insurer American International Group Inc (AIG.N) ran into trouble. Ultimately the government rescued AIG with $182 billion in government funds. Fed oversight could be costly for companies as it involves maintaining higher capital reserves, having a plan for liquidation in the event of a failure and other regulatory requirements laid out in the law.
Companies trying to avoid the systemic designation have also expressed concerns about how a bank regulator such as the Fed would oversee industries outside its area of expertise. Under Dodd-Frank, banks with more than $50 billion in assets are automatically subject to greater scrutiny by the Fed.
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