Systemically Important Financial Institution (SIFI)

A Systemically Important Financial Institution (SIFI) is a bank, insurer, or other financial entity whose distress or failure would pose a significant risk to the broader financial system and economy, leading to the designation of "too big to fail" by regulatory bodies following the 2008 global financial crisis. These institutions are subject to enhanced regulatory scrutiny, including higher capital requirements and stricter risk management standards, to mitigate the potential for systemic collapse.