US Government Proposes Stricter Oversight of Non-Bank Financial Companies

Financial regulators have proposed a new framework to identify and address threats to financial stability, including closer scrutiny of nonbank financial companies. The proposal reverses guidance issued in 2019 that made it more difficult for nonbank financial companies to be designated as systemically important institutions. The Financial Stability Oversight Council has the power to designate nonbank financial firms as systemically important institutions if their failures pose a threat to financial stability, which would place those firms under the supervision of the Federal Reserve.