Normally a policy just published is controversial because a variety of people beneficially involved. But this list which has not been actually a policy attracts wide attention among people.
Recently AIG and Prudential, two insurers confirmed they are designated as “systemically important financial institutions” (SIFIs) by the new Financial Stability Oversight Council, a regulatory department. And so did GE Capital, the big group GE’s financial arm. These firms and perhaps others, have joined America’s largest banks and clearinghouses in being labeled as “SIFIs”. These on the list of being designated SIFIs will be regulated by the Fed and subjected to tougher capital and operational requirements. Jack Lew, the treasury secretary, said the designations would “protect taxpayers, reduce risk in the financial system, and promoted financial stability."This signals because they are thought to be significant to effect America’s economy, they should get special attention. Some are worried about it. Putting these institutions in the charge of the Fed will inevitably undermine their ability to innovate, says Peter Wallison, a fellow of the American Enterprise Institute. And joining the group of entities perceived to be too big to fail means they will enjoy an implicit government guarantee. That will put them at a funding advantage against smaller companies, he says, and imply that their products are government-backed, a huge help for insurers in particular.
No comments:
Post a Comment