LONDON Jan 8 Global regulators have taken a
first step to identifying financial firms such as brokers and
hedge funds that face extra scrutiny because of the risks they
pose to the wider financial system.
The Group of 20 economies (G20) agreed in 2009 at the height
of the financial crisis that all parts of the financial system
should be supervised, in particular so-called globally systemic
firms of any kind.
A list of top banks and insurers that will have to hold
extra capital has already been drawn up.
The Financial Stability Board (FSB), the G20's regulatory
task force, published a consultation paper on Wednesday
outlining how it could identify other types of financial firms
whose collapse would significantly disrupt world markets.
The FSB said the criteria was similar to that used for banks
and insurers, such as size, complexity and connectedness to the
global financial system.
The document looks at specific sectors such as finance
companies, securities broker-dealers, investment funds and hedge
funds but does not outline what extra requirements those deemed
to be globally systemic would face.
The consultation paper proposes that broker dealers with a
balance sheet of more than $100 billion should be considered for
possible inclusion on the final list of firms that will face
For investment funds it proposed a threshold of $100 billion
in net assets under management, and a threshold of $400 to $600
billion in gross notional exposure for hedge funds.
No date has been set for the new regime to start.