The Federal Reserve Board recognizes there are "critical differences" between banks and insurance companies, Federal Reserve Board chairman-designate Janet Yellen told a Senate committee at her confirmation hearing Nov. 14.
However, Yellen declined to be hemmed in on how the Fed will deal with that issue, saying only that the Fed is undertaking a study as part of its new responsibilities to oversee systemically important insurers as well as insurers designated as thrift holding companies.
"I do believe that one-size-fits-all should not be the model for regulation and that we need to develop appropriate models for regulation and supervision of different kinds of institutions," Yellen said in testimony before the Senate Banking Committee. "Insurance certainly has some very unique features that make them very different from banks. And we're taking the time to try to study what the best way is to craft regulations that would be appropriate for those organizations."
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