The evolution of US financial firms towards greater similarity in underlying business models and strategies creates a fundamental challenge for supervisors, Kevin Stiroh, executive vice-president of the Federal Bank of New York, said in a recent speech.
Stiroh warned homogeneity of US financial firms could lead to them becoming “systemic as a herd”, where shocks could lead to correlated responses and large-scale disruption.
In his remarks on November 1, Stiroh said several factors, including
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