U.S. regulators are set to choose the first non-bank companies likely to be branded potential risks to the financial system, according to two people with knowledge of the plans.
The Financial Stability Oversight Council intends to request confidential data from as many as five U.S. firms at a meeting this month, said the people, who declined to be identified because the plans aren't public. The request is a step toward deciding whether the companies should be subject to Federal Reserve supervision, including stress tests, higher capital levels and tougher liquidity requirements.
Regulators want to ensure that no firm posing a potential risk to the financial system escapes scrutiny, while non-bank financial firms argue that designation would burden them with unnecessary costs and economic stability wouldn't be threatened if they failed. Bailed-out insurer American International Group Inc. has said it meets thresholds the council set to decide which firms require further evaluation. GE Capital, a unit of General Electric Co., has said it expects to be named systemically important.
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