The U.S. central bank is adapting its stress-testing framework to cover the three global insurance companies that it supervises, said Federal Reserve Vice Chairman Stanley Fischer on Wednesday. "While distress at these firms poses risks to financial stability, particularly during a stressful period, certain sources of risk to these firms are distinct from the risks banking organizations face," Fischer said in a speech to a central bank conference in Stockholm. A key task for the Fed's staff is to ensure that the tests for the insurance firms are "appropriate," Fischer said. The Federal Stability Oversight Council, an umbrella group of financial regulators, has designated Prudential , MetLife and AIG as "systemically important," reasoning that a failure of these firms could damage the economy. The Fed has been conducting stress tests for five years on bank holding companies with at least $50 billion in assets.
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