Reuters reported the U.S. financial risk council on Tuesday said it has designated American International Group and GE Capital as systemically risky, bringing them under stricter regulatory oversight. The Financial Stability Oversight Council's decision to name its first set of "systemically important" non-bank firms had been long expected by the financial services industry.

As a result of this designation, the two firms now come under regulation by the Federal Reserve and must meet capital and other requirements. Both AIG and GE Capital chose not to fight the group's efforts to bring them under tougher regulatory scrutiny.

According to the Reuters report, Prudential Financial  which disclosed the council had proposed designating it as systemically risky, said last week it would contest the proposal by asking for a hearing before the regulatory group.