“Regulators are poised to take steps this week to address market vulnerabilities that helped fuel the 2008 financial crisis.
On Monday, a panel of top government officials is expected to propose tougher federal oversight for several large, nonbank financial institutions, including companies like American International Group Inc. On Wednesday, securities regulators plan to propose more stringent rules for the $2.6 trillion money-market-fund industry, which was a source of instability in the fall of 2008 when investors stampeded out of the funds.
The need for such moves has long been apparent but, like many of Washington’s efforts to address financial-system risk, action has been delayed by lobbying efforts, internal government disputes and regulators’ concerns about triggering lawsuits.
It is a problem endemic to implementation of the 2010 Dodd- Frank financial law, with provisions like the Volcker rule banning proprietary trading at banks, rules governing the operations of overseas affiliates of U.S. banks and regulations for trading securities-based swaps still on regulators’ to-do list.”
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