Regulators are forging a pathway to place 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, Treasury Secretary Janet Yellen on Friday said top US officials were voting on 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.
Yellen, who leads the Financial Stability Oversight Council, didn’t identify any firms that could be designated. The group of …
