SIFI Designation

SIFI Designation

The SIFI Designation for Non-Bank Financial Companies (NFC)

A veritable pot of alphabet soup was put together by the FSOC to handle the task of designating non financial companies as SIFI’s. eight regulators: OCC, FDIC, CFPB, FHFA, FRB, NCUA, CFTC & SEC, one independent member with insurance “expertise” and five non-voting members.

Three-Stage Evaluation

The process is split into a three stage evaluation process which applies specific thresholds based on ten criteria. The ten criteria has been incorporated into six categories:

1) Size
2) Interconnectedness
3) Leverage
4) Substitutability
5) Liquidity Risk & Maturity Mismatch
6) Existing Regulatory Scrutiny

Following consideration after stages 1 & 2 the institution is sent a notice of consideration and allowed to submit materials detailing its view of designation “not less” than 30 days thereafter. After this precisely dated process, during which the FSOC can be moving forward requesting documents for Stage 3, a decision is made.

While change is rarely embraced, mandates are accepted begrudgingly. Even more so when the examined institution doesn’t feel the authoritative body has viewed all available alternatives.



SIFI Designation for non-bank companies


SIFI Designation for non-Bank Companies Stage 2


SIFI Designation for non-Bank Companies Stage 2
Go to the Blog entitled The Difference Between Banks and Insurance Companies for greater detail.


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