Government Declares Two Companies ’Too Big To Fail’
2013-07-10 0:00

By Emily Stephenson | Business Insider

The U.S. financial risk council on Tuesday said it has designated American International Group (AIG.N) and GE Capital (GE.N) as systemically risky, bringing them under stricter regulatory oversight.

The Financial Stability Oversight Council’s decision to name its first set of "systemically important" non-bank firms had been long expected by the financial services industry.

The designation shows that regulators believe the two companies are so big their failure could destabilize the financial system. The firms now come under regulation by the Federal Reserve and must meet capital and other requirements.

"These designations will help protect the financial system and broader economy from the types of risks that contributed to the financial crisis," said Treasury Secretary Jacob Lew, who also leads the oversight council.

The risk council, which includes the heads of other financial regulatory agencies, is a relatively new federal body that is testing its powers under the 2010 Dodd-Frank financial reform law for the first time.

After a number of non-bank firms struggled during the 2007-2009 financial crisis, Dodd-Frank gave the regulatory council the power to identify potentially risky non-bank firms and regulate them more like banks.

The first set of designations will not come as a surprise to the financial services industry. AIG in particular was expected to be tagged ’systemically important’ after it received a crisis-era bailout amid fears its size and interconnectedness could bring down the financial system.

[...]

Read the full article at: businessinsider.com



Related Articles
US Taxpayers Just Paid $780 Million To Fund The Latest Greece Bailout Tranche
The E.U. Cracks Up - Finns Against Portugal Euro Bailout
Nigel Farage: "Bombings, bailouts - what on earth are we doing?"
Spain to bailout their banks
Goldman Sachs pay out $111million in bonuses despite taking billions in bailout money
Who got the Bailout Money? Trillions Down the Drain
Greece Hires Goldman Sachs, Rothschild to Help Economy
Goldman Sachs Caught Manipulating Aluminum Prices, Stockpiles About 25% Of Global Inventories In Warehouses
Former AIG chief sues U.S. for $25 billion (Now that’s chutzpah!)
Fed in AIG rescue - $85B loan
Iceland President: Let Banks Go Bankrupt
Iceland’s Hörður Torfason – How to Beat the Banksters


Latest News from our Front Page

Pressure from the United Patriots Front Stops Mosque Plan
2016-04-28 20:10
Pressure from the United Patriots Front appears to have killed off a mosque development in Narre Warren North. The City of Casey council now looks likely to withhold planning approval for the development in a special meeting set for Tuesday night. A council report, to be considered by councillors on Tuesday, recommends that the approval be blocked. The mosque opponents’ cause has been helped by councillor ...
Police face questions over the influence of the Freemasons
2016-04-28 20:48
South Yorkshire Police today face questions over whether powerful 'secret society' the Freemasons held sway over the force at the time of Hillsborough. Families of victims say that officers who were Masons were promoted into powerful positions despite being ill-equipped, including match commander David Duckenfield. Duckenfield told the fresh inquests he had been a Freemason since 1975 and became head of his ...
England Bans its Own Flag to Avoid Offending Muslims
2016-04-27 2:23
St. George's Cross "racist" towards immigrants Government officials said their city was ‘too multicultural’ to celebrate St George’s Day, England’s version of the 4th of July. The council said that displaying the English flag may have been seen as “racist” towards immigrants.
Half of Western European men descended from one Bronze Age ‘king’
2016-04-27 2:09
Half of Western European men are descended from one Bronze Age ‘king’ who sired a dynasty of elite nobles which spread throughout Europe, a new study has shown. The monarch, who lived around 4,000 years ago, is likely to have been one of the earliest chieftains to take power in the continent. He was part of a new order which emerged in ...
"Local Residents" Are Filmed Stealing Dozens of Bottles of Water at London Marathon Stop
2016-04-25 23:10
Editor's Comment: "Local" residents? Why bother blurring their faces? We know who they are. ... London marathon runners were robbed of dozens of bottled waters when thieves raided a refreshment area armed with trolleys during today's race. Nearby residents - including parents with children - were captured on camera piling up crates of free water handed out by volunteers during the 26-mile event. Marathon ...
More News »