On Friday, July 17, 2015, the Federal Reserve released a proposal (the “Proposal”) to amend the capital plan and stress test rules for large bank holding companies and certain banking organizations with total consolidated assets of more than $10 billion. The proposed changes would take effect beginning with the 2016 capital planning and stress testing cycles, the submissions for which are due April 5, 2016 based on a planning horizon beginning with actual capital levels as of December 31, 2015. … Read More
We have prepared visuals of the 2015 Comprehensive Capital Analysis and Review (“CCAR“) and Dodd-Frank Act Stress Test (“DFAST“) results. At this time, the visuals include the company-run DFAST results for 24 out of the 31 companies participating in this year’s CCAR program.
Background on DFAST: Pursuant to its DFAST regulations, the Federal Reserve conducts annual supervisory stress tests to assess the potential impact of various hypothetical economic scenarios on the consolidated earnings, losses and regulatory capital of each U.S.… Read More
The Federal Reserve has issued a final rule that amends certain aspects of its capital planning and stress testing regulations. We have prepared a blackline (available here) of the Federal Reserve’s final rule against the proposed rule issued in June 2014.
Today, the Federal Reserve issued a proposal to revise certain aspects of its capital planning and stress testing regulations. We have prepared a blackline (available here) showing these proposed changes.
Key changes: The proposal would, among other things:
- Shift the start date of the capital plan and stress test cycles from October 1 of a calendar year to January 1 of the following calendar year. A large (≥$50 billion) bank holding company (“BHC“) would be required to submit its capital plan and stress test results to the Federal Reserve by April 5, three months later than under current regulations.
Federal Reserve Governor Tarullo Discusses Removal of Internal Ratings-Based (IRB) Approach to Regulatory Capital
Today, Federal Reserve Governor Daniel K. Tarullo delivered a speech that, among other things, argued for discarding the advanced internal ratings-based (IRB) approach for calculating risk-based capital requirements. Currently, under U.S. Basel III, the advanced IRB approach applies to U.S. banking organizations with at least $250 billion in total consolidated assets or at least $10 billion in on-balance-sheet foreign exposures. Governor Tarullo also argued for increasing the $50 billion applicability threshold for Dodd-Frank enhanced prudential standards to a higher asset level, such as $100 billion. … Read More
U.S. Intermediate Holding Company: Structuring and Regulatory Considerations for Foreign Banks – Visual Memorandum
Establishing a top-tier U.S. intermediate holding company (IHC) that complies with Dodd-Frank enhanced prudential standards involves complex structuring, regulatory, capital, liquidity, tax and corporate governance considerations as well as significant business, legal and operational analysis. We have prepared a visual memorandum (available here) that uses flowcharts, diagrams, comparison tables and timelines to explore key structuring and regulatory considerations for foreign banks that are required to establish an IHC.