Emerging industries like cryptocurrencies will come under scrutiny as U.S. proposes stronger oversight of non-banks posing systemic risk

The top U.S. financial regulator has proposed strengthening the tools it uses to scrutinize nonbank companies, including revising Trump-era guidelines, Kim Ten reported. U.S. Treasury Secretary Yellen announced a proposal from the U.S. Financial Stability Oversight Council (FSOC) that would change the way non-banks are designated as systemically important. "Existing guidance, issued in 2019, places undue barriers in the designation process," Yellen said. Such a designation process, which could take six years to complete, is impractical and could prevent the committee from taking action to address emerging risks to financial stability before it is too late, she said. Yellen's comments marked a long-awaited shift in the Biden administration's scrutiny of large nonbanks. Areas likely to come under scrutiny include insurance companies, private equity firms, hedge and mutual fund firms, and emerging industries such as cryptocurrencies.