Systemically Important Financial Institution: Difference between revisions
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imported>John Grout (To make clear extends to non-banks) |
imported>Doug Williamson m (Spelling corrections - 30/10/13) |
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(SIFI.) | (SIFI.) | ||
A financial firm whose disorderly failure would because of its: | A financial firm whose disorderly failure would, because of its: | ||
(i) Size, | (i) Size, | ||
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cause significant disruption to the wider financial system and to economic activity in its (main) country or region of operation. | cause significant disruption to the wider financial system and to economic activity in its (main) country or region of operation. | ||
The idea | The idea was developed for banks considered too big to fail. It has been extended to other types of institutions and the Financial Stability Oversight Council in the US, for example, has provisionally identified certain insurance companies and investors as potential US SIFIs. | ||
Revision as of 16:59, 30 October 2013
(SIFI.)
A financial firm whose disorderly failure would, because of its:
(i) Size,
(ii) Complexity, and
(iii) Systemic interconnectedness
cause significant disruption to the wider financial system and to economic activity in its (main) country or region of operation.
The idea was developed for banks considered too big to fail. It has been extended to other types of institutions and the Financial Stability Oversight Council in the US, for example, has provisionally identified certain insurance companies and investors as potential US SIFIs.
