Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

U.S. financial regulators to tighten rules on non-bank firms, risk assessment

U.S. financial regulators to tighten rules on non-bank firms, risk assessment

The Financial Stability Oversight Council on Friday proposed guidance to make it easier to designate non-bank financial institutions for regulatory supervision and new procedures to better identify and respond to financial system risks.
The multi-regulator council charged with policing stability risks in the financial system released the proposals for public comment just over a month after two regional bank failures sparked the biggest contagion threat since the 2008 financial crisis.

U.S. Treasury Secretary Janet Yellen has raised concerns about non-bank financial institutions, including hedge funds, private equity firms and pension funds as a potential source of financial instability because of a lack of supervision and.

She said in remarks to the FSOC's meeting that the banking system remains sound, but "we continue to be vigilant and monitor conditions closely."

But the banking sector turmoil showed that showed financial regulators' "work is not done" and supervisory and regulatory changes are needed "to help prevent financial disruptions from starting and spreading in the first place," Yellen said.

FSOC, chaired by Yellen and including Federal Reserve Chair Jerome Powell and head of other major financial regulators, was granted the ability to designate non-bank firms as systemically important, but this was made more difficult in 2019 with changes made under the Trump administration.

The new guidance removes some "inappropriate hurdles" to designating non-bank firms and replaces them with a process that allows for firms under review to have significant engagement with regulators.

National Credit Union Administration Chair Todd Harper described the 2019 designation process as "an overly lengthy and Rube Goldberg-like process with various hurdles for doing so."

"This new guidance that we are releasing today for public condiment provides a substantial improvement in this process. It has an important attributes of being clear, credible, balanced and consistent," he said.

A U.S. Treasury official told reporters, however, that the new guidance was not a full return to the original 2012 rules put in place by the Dodd-Frank financial reform law.

RISKS, VULNERABILITIES
FSOC's proposed new risk assessment framework aims to enhance the council's ability to address financial stability risks by reviewing a broad range of asset classes, institutions and activities, according to a Treasury fact sheet.

These include markets for debt, loans, short-term funds equities, digital assets and derivatives; counterparties, payment and clearing systems; and financial entities including banking institutions, broker dealers, asset managers, investment firms, insurers, and mortgage originators and services.

The new framework also specifies vulnerabilities that FSOC and member regulators would consider when evaluating potential stability risks. These include leverage, liquidity risk and maturity mismatches, market interconnections and concentration, operation risks and risk management activities.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Historic Papal Conclave Set to Commence in Rome
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
EU Hits TikTok with €530 Million Fine Over China Data Transfers
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
U.S. and Ukraine Poised to Sign Strategic Critical Minerals Deal Amid Geopolitical Shifts
Spain Restores Power After Unprecedented Nationwide Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
How do you fix this culture?
Corrupted from Within: How Deep State Power and Unelected Judges Hijacked Democracy Against the Will of the People
President Trump and Ukrainian President Zelensky just held an impromptu discussion on the sidelines of Pope Francis' funeral in Rome.
World Leaders Gather in Rome for Pope Francis's Funeral
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Peter Navarro: The Man Behind Trump’s Tariff Madness
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Pope Francis: head of the Catholic church who pushed for social and economic justice
China do not pay these tariffs - you pay it. This is new 145% tax you pay to the US government.
Cultural Battles in the Vatican: The Candidates in the Battle for the Holy See and Pope Francis's Testament
Global Leaders Pay Tribute to Pope Francis Following His Death
Wild Chimpanzees Observed Bonding Over Alcoholic Fruit
Greek Christians Celebrate Easter in Thessaloníki
US Federal Reserve Chair Issues Warning on Tariff Impact
China, China, China!
Pope Francis Makes Brief Appearance at Easter Sunday Mass
Saudi Arabia Offers Max Verstappen Unprecedented Deal to Join Aston Martin
Global Pistachio Shortage Amid Rising Demand for 'Dubai Chocolate'
Trump is assembling a coalition of Western leaders aligned with the MAGA vision, strengthening a unified front for global change
IMF Predicts No Global Recession Amid Trade Tensions
Alphabet Faces Antitrust Setbacks as Federal Judges Rule Against Google
US Billionaires Call for Higher Taxes, but Proposed 'Millionaires Tax' May Not Achieve Desired Outcome
This is Vienna, Austria in 2025.
Designed in US, made in China: Why Apple is stuck in tariff tussle
Boeing Jet Returns to US from China Amid Tariff War
US Sets Deadline for Russia-Ukraine Peace Deal Brokerage
Italy Introduces 'Sex Rooms' in Prisons for Inmates
Italian Prime Minister Giorgia Meloni Meets with Donald Trump to Discuss EU-US Trade Tensions
South East Asia Caught in US-China Trade Dispute
Ukraine and US Sign Outline of Minerals Deal
U.S. and Panama Finalize Defense Agreements Amid Canal Access and Chinese Influence Concerns
×