On July 17, the Board of Governors of the Federal Reserve System (the “FRB”) released a notice of proposed rulemaking (the “NPR” and the rules set forth therein, the “Proposed Rule”) that would modify certain aspects of the FRB’s capital plan rule (the “Capital Plan Rule”) and Dodd-Frank Act stress test rules (the “DFAST Stress Test Rules”) applicable to large bank holding companies (“BHCs”) and certain banking organizations with total consolidated assets of more than $10 billion. The NPR would also affect elements of the … Read more
Yesterday afternoon, Senate Banking Committee Chairman Richard Shelby (R-AL) released a discussion draft of “The Financial Regulatory Improvement Act of 2015” (the “Discussion Draft”). This proposed legislation would significantly amend certain aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), in particular the current regulatory framework for designating and regulating so-called systemically-important financial institutions, or “SIFIs.” In addition, the 216-page Discussion Draft would substantially broaden the Dodd-Frank safe harbor for “qualified mortgages” and includes a number of other notable provisions relating to the regulation of insurance companies, the structure and operation of the Federal Reserve System, and … Read more
On November 18, 2014, the Federal Deposit Insurance Corporation (the “FDIC”) published a final rule (the “Final Rule”) modifying certain elements of its deposit insurance assessment system for insured depository institutions (“IDIs”). The Final Rule amends the FDIC’s 2011 revised methodology for determining insurance assessment rates both for large institutions and for highly complex institutions (the “2011 Assessments Rule”)—the so-called “scorecard” method that is currently used to calculate assessment rates for these institutions. The Final Rule indicates that it is intended to align the deposit insurance assessment system for all IDIs—including advanced approaches banking organizations—with the standardized approach (the “Standardized … Read more
[On November 5, 2014,] the Board of Governors of the Federal Reserve System (the “Federal Reserve”) approved a final rule (the “Final Rule”) implementing Section 622 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which establishes a financial sector concentration limit (the “Section 622 Concentration Limit”). The Section 622 Concentration Limit generally prohibits insured depository institutions, bank holding companies, foreign banking organizations (“FBOs”) that are treated as bank holding companies, savings and loan holding companies, other companies that control an insured depository institution, as well as nonbank financial companies designated by the Financial Stability Oversight … Read more
On May 8, 2014, the Board of Governors of the Federal Reserve Board (the “FRB”) issued a notice of proposed rulemaking (the “Proposed Rule”) implementing the financial institutions concentration limit provision in new Section 14 of the Bank Holding Company Act of 1956 (the “BHCA”), which was added to that statute by Section 622 of the Dodd-Frank Act. Section 622 generally prohibits financial companies from consummating business combinations if, after giving effect to the consummation, the total consolidated liabilities of the resulting financial company would exceed 10 percent of the aggregate consolidated liabilities of … Read more
Federal Reserve Issues Interim Final Rules Addressing Application of New Basel III-Based Capital Framework for Purposes of the 2013-2014 Capital Plan and Stress Test Cycle
The Federal Reserve recently issued two interim final rules that clarify how covered companies must incorporate the new U.S. Basel III-based final capital rules (the “Basel III Capital Rules”) into their capital plan submissions and Dodd-Frank Act stress tests for the upcoming 2013-2014 cycle.
To address and clarify the potential issues created by the interaction of the overlap of the nine-quarter planning horizon of the Federal Reserve’s current version of the capital plan
The Basel Committee on Banking Supervision (the “Basel Committee”), in consultation with the Committee on Payment and Settlement Systems, recently published a final document concerning supervisory monitoring tools for intraday liquidity management (the “Intraday Liquidity Document”).
The Intraday Liquidity Document complements the Basel Committee’s overall liquidity risk management framework by setting forth a new set of metrics (or “ monitoring tools”) intended to enable national supervisors to monitor banks’ intraday liquidity risk and ability to meet payment and settlement obligations on a timely basis under both normal and stressed conditions. The tools are also intended to benefit authorities responsible for … Read more