In long anticipated move in cracking down risks in the market, regulators proposed the designation of American International Group Inc. (AIG), GE Capital and Prudential Financial Inc. for regulatory oversight.

The regulators from the Financial Stability Oversight Council stated that its purpose of having non-bank financial companies undergo regulations is to prevent future destabilization in the financial markets.

Said regulators did not name firms that were involved however AIG, GE Capital and Prudential confirmed of having received a notification of designation that the risk council has designated them.

The final determination of the council is systematically important to a firm. This is because it will trigger extra scrutiny from the Federal Reserve.

The risk council was created and was given power to bring non-bank firms after such companies failed or have been bailed out during the 2007-2009 economic crises. Companies that have been confirmed to undergo oversight would have to undergo regular stress tests and need to comply with new requirements for capital investments. They would also need to provide programs and policies stating remedies once the firm falls apart.