MNI BRIEF: US Mulls Regulation of Money-Market, Hedge Funds

The Biden administration is moving to make it easier to more closely regulate nonbank financial institutions such as hedge funds and money-market funds, Treasury Secretary Janet Yellen said, proposing a rollback of Trump-era procedures.

The Financial Stability Oversight Council, a group of top federal regulators, is proposing to change the way it designates nonbanks as systemically important, Yellen said. That label currently only applies to the nations’ largest banks and allows extra oversight from the Federal Reserve. “The existing guidance — issued in 2019 — created inappropriate hurdles as part of the designation process,” she said.

“We are proposing revisions to certain elements of the Council’s existing guidance that have made it difficult to use its nonbank designation authority,” Yellen said. Regulators voted unanimously for the new framework.