Skadden Discusses Proposed Updates to Banking Rules for Derivative-Contract Exposure

On October 30, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) jointly invited comment on a proposed regulation that, if adopted, should provide regulatory capital relief for certain derivative exposures. If adopted, the regulation would amend the agencies’ risk-based and leverage capital requirements for banking organizations. The proposal is subject to public comment for 60 days following its publication in the Federal Register.

The proposal would implement a “standardized approach for counterparty credit risk” (SA-CCR) to replace the current exposure methodology … Read more