Systemically Important Financial Institution (SIFI)

A Systemically Important Financial Institution (SIFI) is a large bank or financial company whose failure could cause significant disruption to the entire financial system and economy. Because of their size, interconnectedness, and importance, SIFIs are subject to stricter regulations and oversight to prevent such failures. They are considered "too big to fail," meaning their stability is vital to maintaining confidence and avoiding widespread economic problems. Essentially, SIFIs are key financial players whose health affects the stability of the global or national financial system.