AIG Targeted as Likely ‘Systemically Important’ Financial Firm

October 2, 2012

Insurance giant American International Group Inc. said that it has received a notice from the Financial Stability Oversight Council (FSOC) that it is under consideration as a “systemically important financial institution” pursuant to the Dodd-Frank Wall Street reform act.

The FSOC notified AIG that it will be among the firms reviewed as part of the process of finalizing a list of systemically important nonbank financial companies but is not a final determination.

Last week, the FSOC said it would be notifying the companies under consideration for the systemically important classification but it would not be naming them publicly before it makes its final decisions.

Companies classified as “systemically important” nonbank financial institution will face stricter oversight from the Federal Reserve and higher capital and liquidity standards under provisions of the 2010 Dodd-Frank financial oversight law. This law created the FSOC, the members of which include the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, the Consumer Financial Protection Bureau and the Comptroller of the Currency.

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