The Financial Stability Oversight Council designated American International Group (AIG) and GE Capital as systemically important, which brings both companies under stricter regulatory oversight. The U.S. financial risk council said that the two companies are so big and important that any possible failure may cause destabilization in the financial system.
The designation by the oversight council brings the companies under regulation by the Federal Reserve, at which the designation carries additional capital and other needed requirements.
Treasury Secretary Jacob Lew said, "These designations will help protect the financial system and broader economy from the types of risks that contributed to the financial crisis."
The risk council set by the Financial Stability Oversight Council includes heads of other financial regulatory agencies. The council does not name other the companies that are under consideration until the issuance of final designations. The group is a newly established federal body that is currently testing its powers under the 2010 Dodd-Frank financial reform law.
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