Dennis Ross: SIFI Designations are 'Arbitrary'

Count U.S. Rep. Dennis Ross, R-Fla., as skeptical over systemically important financial institution (SIFI) designations.

In a U.S. House Financial Services Committee hearing on Tuesday, Ross asked Peter Wallison, a financial expert at the American Enterprise Institute (AEI), about SIFI designations.

I guess my question is, how can these organizations that are under review for SIFIs anticipate whether they are going to be designated as such when we really cant get our hands around what significant means? Ross asked. As you point out, its very arbitrary.

Its arbitrary; its not a standard; its not something that anyone can use to adjust -- no firm can use to adjust its activities; there is really no information that is conveyed by that term, Wallison replied.