The U.S. systemic risk council will meet on Sept. 4 to discuss naming nonbank financial firms for tougher regulatory oversight, the U.S. Treasury Department said on Thursday.
The Financial Stability Oversight Council (FSOC) appears close to deciding whether it believes insurer Metlife Inc. is “systemically” risky, or so big its hypothetical failure could destabilize global financial markets.
The council has already given this designation to insurers Prudential Financial Inc and American International Group Inc., and General Electric Co.’s financial services unit.
The tag means they will be regulated more like U.S. banks and will come under scrutiny from the Federal Reserve.
At its closed-door meeting next week, the group, which is led by Treasury Secretary Jack Lew, will discuss naming additional nonbank firms for such oversight, according to an update on the FSOC’s website.
They did not name which firms are under consideration. Regulators recently took a procedural step to pave the way for a vote on Metlife.
The council is made up of the heads of U.S. regulatory agencies, including the Fed and the Securities and Exchange Commission. It was created by the 2010 Dodd-Frank Act and charged with monitoring risks to the global financial system in an effort to prevent another massive meltdown.
The group also will discuss its research into asset managers such as BlackRock, which it has been studying to determine whether the industry poses systemic risks.
It will also hear an update on banks’ so-called living wills, or plans for how they could go through bankruptcy rather than be bailed out in a crisis.
The Fed and the Federal Deposit Insurance Corp. on Aug. 5 told 11 big banks, including JPMorgan Chase and Citigroup, that their plans were not up to scratch.
(Reporting by Emily Stephenson; Editing by Jonathan Oatis)
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