The Dodd-Frank Act, in addressing systemic risks to the financial system, requires federal regulators to extend a variety of requirements to nonbank financial institutions that are deemed "systemically important." But how can regulators, and the institutions themselves, best determine whether an institution is systemically important? Research in this area has generated a number of potential approaches.
Acharya, Viral V., Lasse H. Pedersen, Thomas Philippon, and Matthew Richardson, "Measuring Systemic Risk," Manuscript, May 2010.
Adrian, Tobias and Markus K. Brunnermeier, "CoVaR," Manuscript, November 2010.
Elliott, Douglas J. and Robert E. Litan, "Identifying and Regulating Systemically Important Financial Institutions: The Risks of Under and Over Identification and Regulation," Brookings Policy Brief, January 2011.
Giglio, Stefano. "Credit Default Swap Spreads and Systemic Financial Risk," Manuscript, January 2011.