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October 01, 2012 at 06:27 AM
The Financial Stability Oversight Council (FSOC) started the clock ticking on the six-month process for designating a non-bank as systemically significant (SIFI) on Friday.
Ryan Schoen and others at Washington Analysis said in an investor’s note that, “While FSOC did not disclose which companies were considered in today’s meeting, we expect the list to be short (probably no more than five to seven institutions), including, but not limited to, AIG, MetLife, Prudential, and General Electric.”
In a statement to reporters, a Treasury Department spokesman confirmed the decision.
The process is called the “third stage” of determining whether an institution should be designated SIFI.
According to Schoen it gives the companies an opportunity to respond to the request for information and to request a hearing to contest the proposed designation.
Schoen said that, based on the timelines laid out in the statute and regulations, Washington Analysis expects the final designations to come in either in December or in the first quarter of 2013.
Before the FSOC publicly announces the final determinations, it will provide the nonbank financial company formal notice of at least one business day Schoen said.
