[Update: We have prepared a chart (available here) that compares the U.S. banking agencies’ proposed revisions to the SLR with the Basel Committee’s January 2014 revisions to the Basel III leverage ratio.] Today, the U.S. banking agencies finalized higher leverage capital standards for the 8 U.S. bank holding companies that have been identified as global systemically important banks (“U.S. G-SIBs”) and their insured depository institution (“IDI”) subsidiaries. The agencies also proposed important changes to the denominator of the U.S.… 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.
The Federal Reserve has scheduled an open meeting for Tuesday, April 8, 2014, at 4:00 p.m., to vote on the following capital-related rulemakings:
1. A draft interagency final rule implementing enhanced supplementary leverage ratio (SLR) standards for large, interconnected U.S. banking organizations.
- Davis Polk’s memorandum on the U.S. banking agecies’s July 2013 proposed enhanced SLR standards for U.S. G-SIBs is available here.
2. An interagency notice of proposed rulemaking that would modify the definition of total leverage exposure (the denominator of the supplementary leverage ratio) and the calculation of the ratio in the agencies’ 2013 revised capital rule.… Read More
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.
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
We have prepared visuals (available here) of the Federal Reserve’s 2014 supervisory Dodd-Frank Act stress test (“DFAST“) results. Update: We have updated these visuals to reflect the company-run DFAST results and the Federal Reserve’s 2014 Comprehensive Capital Analysis and Review (“CCAR“) results.
Background: On March 20, 2014, the Federal Reserve published results of the 2014 supervisory DFAST for 30 U.S. bank holding companies with $50 billion or more in total consolidated assets (“Large BHCs“). … Read More
Davis Polk Blackline of Federal Reserve’s Corrections to Dodd-Frank Stress Test Capital Ratio Projections
Today, the Federal Reserve published corrections to its 2014 supervisory Dodd-Frank Act stress test (“DFAST“) results. We have prepared a blackline (available here) showing the Federal Reserve’s revised capital ratio projections for 30 large U.S. bank holding companies under the supervisory severely adverse stress scenario. According to the Federal Reserve, it adjusted the supervisory DFAST results to “address inconsistencies in the treatment of the fourth quarter 2013 actual capital actions and assumptions about preferred and employee compensation-related issuance over the course of the planning horizon.”
Federal Reserve, Dodd-Frank Act Stress Test 2014: Supervisory Stress Test Methodology and Results (originally published on Mar.… Read More