Looking backwards

4 June 2013 By Agnes T. Crane

AIG and GE Capital are among the non-bank firms designated systemically risky by the financial stability uber-regulator. These are no-brainers for the SIFI moniker. Trouble is, five years on watchdogs are still bogged down in the last crisis rather than looking out for the next.

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American International Group, General Electric’s finance unit GE Capital and Prudential Financial said on June 3 that the U.S. Financial Stability Oversight Council had identified them as systemically important non-bank financial institutions, or SIFIs. The companies have the right to appeal the designation. The three companies are the first non-banks to be classified as SIFIs. Designated companies will be supervised by the Federal Reserve and subject to new oversight standards.
On June 5, the Securities and Exchange Commission may take up new regulations for money market mutual funds again after Mary Schapiro, the former chairman, failed to convince fellow commissioners to move forward with them in 2012.

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