Toward a Framework for Macroprudential Regulation and Supervision of Systemically Important Financial Institutions (SIFI)

One of the key features of regulatory-supervisory reform thinking post 2006-2007 Global Financial (nee US Subprime Mortgage) Crisis is emergence and popularisation of the ‘systemic' theme. In a similar vein, talks of ‘too interconnected to fail' superseding ‘too big to fail' widely circulate. Yet a coherent framework for defining, identifying, and quantifying what constitutes so-called Systemically Important Financial Institutions (SIFI) is sorely lacking. Presented in a Q&A format, this article attempts to pave the way toward formulating and formalising a framework for macroprudential regulation and supervision of such entities