Finance
US Lays Path for More Financial Giants to Get Fed Oversight
- Officials led by Janet Yellen describe bid to mitigate risk
- The systemically important tag would mean stepped-up oversight
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The US government laid out a pathway for placing firms other than banks under strict Federal Reserve oversight, a major regulatory threat to hedge funds and investment companies.
After months of back-and-forth, Washington’s top financial officials on Friday released a new framework for designating financial firms as systemically important. That too-big-to-fail tag, which brings significant compliance costs and regulatory headaches, has mostly been applied to large Wall Street banks since its introduction more than a decade ago.