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Home Archive for category "Dodd-Frank" (Page 2)
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Summary and Blackline of OCC’s Proposed Revisions to National Bank and Federal Savings Association Licensing Rules

We have prepared a summary and blackline (available here) of the OCC’s proposed changes to its rules for national banks and federal savings associations relating to policies and procedures for corporate activities and transactions (“licensing rules”).

Background: The Dodd-Frank Act transferred to the OCC all functions of the former Office of Thrift Supervision (OTS) relating to federal savings associations. With a few exceptions, the OCC currently has one set of rules applicable to national banks and another set of rules applicable to federal savings associations, or, where appropriate, to all savings associations.…  Read More

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Basel Committee Chair Discusses Liquidity Risk Management

The Chairman of the Basel Committee, Stefan Ingves, delivered a speech entitled Liquidity risk management – the LCR and beyond. In addition to discussing the Basel III liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), Chairman Ingves reminded banks that “the LCR and NSFR are not meant to be the first line of defence against banks’ liquidity problems.” He observed that “the LCR and NSFR are relatively simple quantitative measures that cannot hope to fully capture the many nuances of liquidity risk that a bank may face” and that “[b]anks must develop a range of quantitative and qualitative controls for themselves to ensure that they are prepared for the volatility in their cash flows that is inherent in the complexity of banks’ business models.” In this context, Chairman Ingves discussed the Basel Committee’s Principles for sound liquidity risk management and supervision and concluded by stating that:

“The first line of defence against the impact of future liquidity shocks on the banking system is stronger risk management by banks themselves. Read More

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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

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Summary of Basel Committee’s Final Large Exposures Framework

Following is a summary of the Basel Committee’s final framework for measuring, reporting and limiting a bank’s exposures to single counterparties and groups of connected counterparties. The large exposures framework, which relies on a number of concepts in the Basel Committee’s risk-based capital framework, is intended to ensure greater international consistency in regulatory and supervisory approaches to large exposures and to act as a backstop to risk-based capital requirements.

Blackline Showing Changes: Davis Polk’s blackline of the Basel Committee’s April 2014 final vs.…  Read More

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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.

View IHC Structuring Visual Memorandum Read More

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Visuals of Federal Reserve’s 2014 CCAR and Dodd-Frank Stress Test Results (updated for company-run results)

We have prepared visuals (available here) of the 2014 Comprehensive Capital Analysis and Review (“CCAR“) and Dodd-Frank Act Stress Test (“DFAST“) results.   Update:  The visuals have been updated to include the company-run DFAST results.

View Davis Polk’s Visuals of 2014 CCAR and DFAST Results

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

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