Systemically Important Financial Institutions

Systemically Important Financial Institutions (SIFIs) are large banks or financial entities whose failure could significantly impact the overall financial system and economy. Because they hold large amounts of assets, have complex interconnections, and provide critical services, their collapse could lead to widespread financial instability. To prevent this, regulators closely monitor SIFIs and may impose stricter rules and capital requirements. The goal is to ensure these institutions are resilient enough to withstand financial shocks and to protect the economy from potential crises stemming from their failure.