Global regulators have taken a first step to identifying financial firms such as brokers and hedge funds that face extra scrutiny because of the risks they pose to the wider financial system.
The Group of 20 economies (G20) agreed in 2009 at the height of the financial crisis that all parts of the financial system should be supervised, in particular so-called globally systemic firms of any kind.
A list of top banks and insurers that will have to hold extra capital has already been drawn up.
The Financial Stability Board (FSB), the G20’s regulatory task force, published a consultation paper on Wednesday outlining how it could identify other types of financial firms whose collapse would significantly disrupt world markets.
The FSB said the criteria was similar to that used for banks and insurers, such as size, complexity and connectedness to the global financial system.
The document looks at specific sectors such as finance companies, securities broker-dealers, investment funds and hedge funds but does not outline what extra requirements those deemed to be globally systemic would face.
The consultation paper proposes that broker dealers with a balance sheet of more than $100 billion should be considered for possible inclusion on the final list of firms that will face extra requirements.
For investment funds it proposed a threshold of $100 billion in net assets under management, and a threshold of $400 to $600 billion in gross notional exposure for hedge funds.
No date has been set for the new regime to start.
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