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Home Archive for category "Dodd-Frank" (Page 5)
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Volcker TruPS CDO Interim Final Rule: The Bottom Line

Here is the bottom line for the Volcker TruPS CDOs interim final rule issued by the U.S. regulators yesterday.

No Relief for CLOs:  The rule does not help CLOs at all.

TruPS CDOs:  For TRuPS CDOs we believe it will be very helpful.

Specifically, the interim final rule permits any banking entity, large or small, to retain an interest in, or to act as sponsor (including as trustee) of, an issuer that is backed by TruPS so long as:

  • The TruPS CDO issuer was established before May 19, 2010;
  • The banking entity reasonably believes that the offering proceeds received by the issuer were invested primarily in Qualifying TruPS Collateral; and
  • The banking entity’s interest in the vehicle was acquired on or before December 10, 2013 (unless acquired pursuant to an M&A).
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Basel Committee Issues Second Proposal on Risk-Based Capital Requirements for Securitization

Today, the Basel Committee issued a second proposal to revise the risk-based capital requirements for securitization exposures.  In developing the proposal, the Basel Committee took into account comments received on its first proposal and the results of a quantitative impact study (QIS).

Compared with the Basel Committee’s first proposal, the major changes in the second proposal relate to the hierarchy of approaches for securitization exposures and the calibration of capital requirements.

Proposed hierarchy of approaches.  The Basel Committee proposes the following hierarchy of approaches for determining the capital requirement for securitization exposures:

  1. Where banks have the capacity and supervisory approval to do so, they may use an internal ratings-based approach to determine the capital requirement based on the internal ratings based approach capital charge for the underlying pool of exposures, including expected losses.
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Federal Reserve Publishes Paper on Capital Planning at Large Bank Holding Companies

Today, the Federal Reserve published a paper entitled Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice.  The paper is intended to promote better capital planning at large bank holding companies (BHCs) and to provide greater clarity on the standards against which those practices are evaluated as part of the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR).

The paper discusses the Federal Reserve’s expectations for capital planning at large BHCs and described the range of practices it has observed at these companies during the past three CCAR exercises. …  Read More

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Federal Reserve Issues Final Rule Establishing Annual Dodd-Frank Assessment Fees for Supervision and Regulation of Large Financial Companies

Today, the Federal Reserve Board issued a final rule establishing annual Dodd-Frank assessment fees for its supervision and regulation of large bank holding companies, large savings and loan holding companies and nonbank financial companies designated as systemically important by the Financial Stability Oversight Council (nonbank SIFIs).

The Dodd-Frank Act directs the Federal Reserve to collect assessment fees equal to the expenses it estimates are necessary or appropriate to supervise and regulate bank holding companies and savings and loan holding companies with $50 billion or more in total consolidated assets and nonbank SIFIs.…  Read More

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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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