The Federal Reserve’s Dodd-Frank enhanced prudential standards (EPS) final rule adopts a tiered approach for applying EPS to foreign banks. Under the tiered approach, the most burdensome requirements will only apply to foreign banks with large U.S. operations, whereas fewer requirements will apply to foreign banks with limited U.S. footprints. We have prepared a visual memorandum focusing on the requirements that will apply to foreign banks with limited U.S. footprints, including the U.S. risk committee, internal liquidity stress testing, home country capital certification and home country capital stress testing requirements.… Read More
The following chart provides a high-level comparison of the Federal Reserve’s Dodd-Frank stress testing requirements, related reporting requirements and supervisory expectations for (1) large banking organizations (≥$50 billion in total consolidated assets) and (2) mid-size banking organizations (>$10 billion and < $50 billion in total consolidated assets). The comparison chart is based on information contained in a recent Federal Reserve Supervision and Regulation (SR) letter. Our blackline of the U.S. banking agencies’ final vs. proposed Dodd-Frank stress test supervisory guidance for mid-size banking organizations is available here.… Read More
We have prepared a blackline that compares (1) the U.S. banking agencies’ final supervisory guidance regarding annual Dodd-Frank company-run stress tests for banking organizations with $10 billion to $50 billion in total consolidated assets (mid-sized banking organizations) against (2) the July 2013 proposed supervisory guidance.
The Federal Reserve’s Dodd-Frank enhanced prudential standards final rule requires a foreign banking organization with $50 billion or more in U.S. assets to maintain separate U.S. liquidity buffers for its U.S. branches/agencies and U.S. intermediate holding company. We have prepared a visual memorandum that uses diagrams, flowcharts, examples and an interactive calculator to illustrate the U.S. liquidity buffer requirement and related calculations. The interactive calculator allows you to enter various internal and external cash flow amounts to assess the potential impact of the final rule’s prescribed method for calculating net stressed cash flow need.… Read More
We have prepared two visual summaries of the Federal Reserve’s Dodd-Frank enhanced prudential standards final rule. One visual summary focuses on requirements that apply to U.S. bank holding companies (BHCs) and the other focuses on requirements that apply to foreign banks, including the U.S. intermediate holding company (IHC) requirement.
Today, the Federal Reserve published a final rule establishing Dodd-Frank enhanced prudential standards for U.S. bank holding companies with ≥$50 billion in total consolidated assets (Large U.S. BHCs) and foreign banking organizations with ≥$50 billion in total consolidated assets (Large FBOs).
By way of background, Section 165 of the Dodd-Frank Act requires the Federal Reserve to establish enhanced prudential standards, including heightened capital standards, liquidity standards, single counterparty credit limits, enhanced risk management requirements, capital stress testing requirements (final rules already issued) and an early remediation framework, for Large U.S.… Read More