On Thursday, U.S. Treasury Secretary Jacob Lew announced that U.S. authorities will soon subject a first batch of large non-banking financial groups to increased scrutiny under the auspices of the United States Federal Reserve (Fed).
“It is important for the Financial Stability Oversight Council (FSOC) to take the time necessary to ensure that their analysis is fair and we expect to be able to vote soon on the appointment of the very first financial society for non-banking companies,” said Lew in Washington.*
Mr. Lew, who chairs the FSOC, made these remarks at the opening of a public meeting consisting of key regulators and financial supervisors of the United States’ economy.
Under the Wall Street Reform Act of 2010, a single regulator, the Fed, must supervise all financial institutions. The Fed, which already controls the largest banks, must wait until the FSOC designates non-banking financial groups as a potential risk to be able to regulate them.
Given their nature and the criteria defined by the FSOC, insurers AIG, Travelers, MetLife and Prudential, and the conglomerate General Electric, which has huge financial activities, including through its subsidiary GE Capital, could be among the first groups identified by the authorities.
*Editor’s Note: This quotation, accurately translated, could not be verified.