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.
Geithner told the House Financial Services Committee in July that the council was “looking very, very carefully” at New York-based AIG and other companies he didn’t name. Geithner has said the council will make the first designations this year.
Bank-holding companies with more than $50 billion in assets -- including Bank of America Corp., JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc., Wells Fargo & Co. and Citigroup Inc. -- are automatically subject to heightened Fed supervision under Dodd-Frank. Non-banks designated systemically important would get Fed oversight similar to that of the large banks.