Since the financial crisis, policymakers have developed two different approaches to systemic risk arising from nonbank financial firms such as insurance companies and investment banks. The first, dubbed an entity-based approach, empowers a public entity like the Financial Stability Oversight...

The recent financial crisis demonstrated that, contrary to longstanding regulatory assumptions, nonbank financial firms — such as investment banks and insurance companies — can propagate systemic risk throughout the financial system. After the crisis, policymakers in the United States and...

After the 2008 financial crisis, policymakers developed two different approaches to systemic risk arising from insurance conglomerates and other nonbank financial firms. The first, dubbed an entity-based approach, empowers a public entity like the Financial Stability Board or Financial Stability...