U.S. regulators are set to choose the first non-bank companies likely to be branded potential risks to the financial system, Bloomberg News reported yesterday. The Financial Stability Oversight Council intends to request confidential data from as many as five U.S. firms at a meeting this month. 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 would not be threatened if they failed.
