The bill announced by Senators Sherrod Brown (D-Ohio) and David Vitter (R-La.) is the latest volley in the ongoing debate about whether financial reform has gone far enough in ending the risk that some banks are too big to fail. Although it is highly unlikely that the Brown-Vitter bill, in its current form, will become law, its erroneous assumptions and assertions, as well as the policy measures proposed by the bill, could resurface, either in other bills or as pressure on regulators to transform the financial regulatory landscape.… Read More
Federal Reserve Issues Final Rule for Determining When a Company is “Predominantly Engaged in Financial Activities” for Purposes of Title I of the Dodd-Frank Act
Today, the Federal Reserve issued a final rule for determining when a company is “predominantly engaged in financial activities” for purposes of Title I of the Dodd-Frank Act. The rule will be used by the Financial Stability Oversight Council (FSOC) when it considers the potential designation of a nonbank financial company as systemically important. Under Title I of the Dodd-Frank Act, a nonbank financial company can be designated as systemically important by the FSOC only if it is “predominantly engaged in financial activities.”
A nonbank financial company that is designated as systemically important by the FSOC will be subject to consolidated supervision by the Federal Reserve and a host of new Dodd-Frank enhanced prudential standards including capital, liquidity, stress testing, single counterparty credit limits, enhanced risk management standards, resolution planning requirements and an early remediation framework.… Read More
Today, the Federal Reserve announced the results of the 2013 Comprehensive Capital Analysis and Review (CCAR), including summaries of the Federal Reserve’s CCAR post-stress capital analysis for each of the 18 large U.S. bank holding companies (BHCs) that participated in the 2013 CCAR.
Of the 18 BHCs that participated in the 2013 CCAR, 14 received approvals from the Federal Reserve for their capital plans, two received conditional approvals while two received objections. The Federal Reserve may object to a capital plan on quantitative or qualitative grounds. … Read More
Today, the Federal Reserve published summary results of Dodd-Frank supervisory stress tests for 18 large U.S. bank holding companies (BHCs). The summary results include the Federal Reserve’s projections of revenues, expenses, losses and the post-stress capital ratios for each of the 18 BHCs under a hypothetical, severely adverse macroeconomic and financial market scenario developed by the Federal Reserve.
Hypothetical Stress Scenario: The Federal Reserve’s severely adverse stress scenario features a deep recession in the United States, Europe and Japan, significant declines in asset prices and increases in risk premia and a marked economic slowdown in developing Asia. … Read More
Federal Reserve Announces Release Dates for Results of Dodd-Frank Supervisory Stress Tests and Comprehensive Capital Analysis and Review (CCAR)
Today, the Federal Reserve announced that results of the Dodd-Frank supervisory stress tests conducted by the Federal Reserve of 18 large bank holding companies (BHCs) will be released on Thursday, March 7 at 4:30 p.m. Eastern Time. The Federal Reserve also announced that results of the 2013 Comprehensive Capital Analysis and Review (CCAR) will be released on Thursday, March 14 at 4:30 p.m. Eastern Time.
Background on Dodd-Frank Supervisory Stress Tests: The Dodd-Frank Act requires the Federal Reserve to conduct an annual supervisory stress test of U.S.… Read More
The Basel Committee has made significant revisions to the Basel III Liquidity Coverage Ratio (LCR). The revised LCR standards allow banks to use a broader range of liquid assets to meet their liquidity buffer and relax some of the run-off assumptions that banks must make in calculating their net cash outflows. The revised standards also clarify that banks may dip below the minimum LCR requirement during periods of stress. The Basel Committee expects national regulators to implement the LCR on a phased-in basis beginning on January 1, 2015.… Read More