As noted earlier, this is an instance in which an evaluation of financial stability effects is the direct test for action. In implementing this authority the FSOC took a methodical, comparative approach. Details can be found in Financial Stability Oversight Council (2012), “‘Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies,”‘ Federal Register, vol. 77 (April 11), pp. 21637.
In the first stage of the process it has established, the FSOC applies a purely quantitative screen in order to identify nonbank financial companies that merit further consideration.