SIFIs

Systemically Important Financial Institutions

To help avoid a repeat of the 2008 financial crisis where risk-taking in the “shadow sector” caused widespread damage to the financial system, the Dodd-Frank Act charges the FSOC with identifying systemically important nonbank financial institutions (SIFIs) for heightened oversight by the Federal Reserve.  In addition, the Act charges the FSOC with making recommendations to the Federal Reserve concerning the establishment of heightened prudential standards for risk-based capital, leverage, liquidity, contingent capital resolutions plans and credit exposure reports, concentration limits, enhanced public disclosures, and overall risk management for nonbank financial companies and large interconnected bank holding companies that are supervised by the Federal Reserve.

The SRC has specifically called on FSOC to expedite determination and designation of all SIFIs and rules for capital requirements, resolution planning, examination and data collection to avoid a repeat of the 2008 financial crisis where risk-taking in the “shadow sector” caused widespread damage to the financial system.