WASHINGTON (AP) — Federal regulators have proposed a group of firms that aren't banks to be deemed potential threats to the financial system that need stricter government oversight.
The regulators didn't name the firms or say how many it wants to designate as so big and interconnected that their potential troubles could imperil the financial system.
The Financial Stability Oversight Council, which includes Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, acted Monday in a closed meeting. It was the most significant step by the council, which was created by the financial overhaul law to help prevent another meltdown.
Nonbank financial firms include insurers and hedge funds. Those deemed "systemically important" would have to increase their cushion against losses, limit use of borrowed money and submit to inspections by Fed examiners.