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U.S. Banking Regulators Propose Dodd-Frank Company-Run Stress Test Guidance for Mid-Sized Banking Organizations

Beginning this fall, many U.S. banking organizations will be conducting their first annual Dodd-Frank company-run stress tests.  Today, the U.S. banking regulators (Federal Reserve, OCC and FDIC) proposed guidance setting forth supervisory expectations for stress tests conducted by national banks, state member and non-member banks, savings associations, bank holding companies and savings and loan holding companies with total consolidated assets of greater than $10 billion and less than $50 billion (collectively, “mid-sized firms”).

The proposed guidance is intended to help mid-sized firms conduct stress tests that are appropriately scaled to their size, complexity, risk profile, business mix and market footprint. …  Read More

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U.S. Banking Agencies Propose Dodd-Frank Act Stress Test Guidance for Medium-Sized Firms

Today, the Federal Reserve, OCC and FDIC proposed supervisory guidance for stress tests conducted by banking organizations with total consolidated assets between $10 billion and $50 billion (mid-sized firms).  Medium-sized firms are required to conduct their first annual Dodd-Frank company-run stress tests beginning this fall.

Among other things, the proposed guidance describes general supervisory expectations for Dodd-Frank Act stress tests, and, where appropriate, provides examples of practices that would be consistent with those expectations.

The public comment period on the proposed supervisory guidance ends on September 25, 2013.…  Read More

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Davis Polk Hosts Webcast Series on U.S. Basel III Final Rule

On July 24, 2013, Davis Polk lawyers Luigi L. De Ghenghi and Andrew S. Fei hosted a series of interactive webcasts on the U.S. Basel III final rule. In three separate sessions, the webcasts discussed key aspects of U.S. Basel III for community banks, regional banks, and foreign banking organizations with significant U.S. operations.
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Overview of Basel Committee’s Proposed Liquidity Coverage Ratio Disclosure Standards

Today, the Basel Committee proposed a set of liquidity coverage ratio (LCR) disclosure standards.  Part of the Basel III liquidity framework, the LCR requires a banking organization to maintain a minimum amount of liquid assets to withstand a short-term liquidity stress period.  Specifically, the LCR requires a banking organization’s stock of unencumbered high-quality liquid assets (HQLAs) to be at least 100% of its total net cash outflows over a 30-day standardized supervisory liquidity stress scenario.  Following is a high-level overview of the Basel Committee’s proposed LCR disclosure standards.…  Read More

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Basel III Leverage Ratio: U.S. Proposes American Add-on; Basel Committee Proposes Important Denominator Changes

On the heels of publishing the U.S. Basel III final rule, the U.S. banking agencies have proposed higher leverage capital requirements for the eight U.S. global systemically important banks (G-SIBs) and their insured depository institution subsidiaries.  The higher leverage capital requirements, which we are calling the American Add-on, build upon the minimum Basel III supplementary leverage ratio in the U.S. Basel III final rule.

Recently, the Basel Committee on Banking Supervision has proposed important changes to the Basel III leverage ratio. …  Read More

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Financial Stability Board Identifies Global Systemically Important Insurers (G-SIIs) and Policy Measures that Will Apply to G-SIIs

Today, the Financial Stability Board (FSB), in consultation with the International Association of Insurance Supervisors (IAIS) and national authorities, identified an initial list of nine global systemically important insurers (G-SIIs).  These G-SIIs were identified using the IAIS assessment methodology.  Going forward, the list of G-SIIs will be updated each year in November, starting in 2014.

Policy Measures Applicable to G-SIIs:  Today, the IAIS also published a set of policy measures that will apply to G-SIIs and are consistent with the policy framework published by the FSB in November 2011.  …  Read More

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