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Systemically Important Financial Institutions (SIFI)

A systemically important financial institution (SIFI) is any firm whose failure could pose a threat to the financial stability of the United States because of its size, its complexity, or its potential riskiness because it isn’t sufficiently regulated by the government. A firm designated as a SIFI is subject to enhanced rules of financial oversight from the Federal Reserve System. The stricter oversight includes increased costs for the SIFI in the forms of (a) higher Tier 1 capital requirements, (b) annual stress tests, and (c) detailed “living wills” in the event the firm should fail.

The Dodd-Frank Act

The 2008–2011 financial crisis threatened the stability of the U.S. financial system and economy as well as the international economy. The crisis revealed two particular weaknesses in the U.S. ...

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