In particular, although the basic process for designation has now been laid out, further refinement of the criteria for designation will be needed; and, for those firms that are ultimately designated, it will fall to the Federal Reserve to develop supervisory frameworks appropriate to each firm’s business model and risk profile.
As the FSOC gains experience with this process, it will make adjustments to its rule and its procedures as appropriate. Regulation of shadow banking I have been discussing the oversight of systemically important financial institutions in a macroprudential context.