Companies will be notified earlier in the process by the
The council also will provide more information on its review process to the companies and the public. Sensitive, confidential company information will still be kept from public view, the council said in a news release.
Business interests that oppose the 2010 financial overhaul law that created the oversight council have accused it of operating without transparency. Among the business groups is the
A designation of "systemically important" means regulators believe a company is so big and entwined with the financial system that it could threaten the economy if it collapsed.
The designation brings stricter government oversight, increased capital requirements as a cushion against losses and limits on use of borrowed money.
The oversight council arose from the 2008 financial crisis. It was created by the
The council members voted in a closed meeting Wednesday to adopt the changes in its process.
"The changes adopted today represent an important step for the council that will increase the transparency of our designations process and strengthen the council overall," Lew said in a statement.
The council was empowered by the 2010 law to tag certain companies for stricter supervision as a way to end "too big to fail": the idea that some financial institutions are so big and crucial to the system that the government would step in to rescue them if they veered toward collapse. That's what happened in the 2008 crisis, with hundreds of millions of dollars in taxpayer aid going to big U.S. banks and other financial institutions.
The council so far has designated four nonbank financial firms as "systemically important":
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