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Capital and Prudential Standards Blog

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Home Archive for category "G-SIB" (Page 2)
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Dodd-Frank Enhanced Prudential Standards Final Rule

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

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Governor Tarullo Outlines Federal Reserve’s Prudential Regulatory Priorities for 2014

In his written testimony before the Senate Banking Committee on Dodd-Frank implementation, Federal Reserve Board Governor Daniel K. Tarullo outlined the Federal Reserve’s prudential regulatory and supervisory priorities for 2014.  As discussed further in this blog post, these priorities include, among other things: (1) finalizing, in the “near term,” Dodd-Frank enhanced prudential standards for large domestic and foreign banking firms; (2) proposing, “fairly soon,” to implement the Basel Committee’s risk-based capital surcharge for global systemically important banks (G-SIBs); (3) finalizing, in the “coming months,” higher Basel III supplementary leverage ratio standards for the 8 U.S.…  Read More

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Revised Basel III Leverage Ratio: Visual Memorandum

The Basel Committee recently finalized its revisions to the Basel III leverage ratio.  Compared to its June 2013 proposal, the Basel Committee has made several important changes to the denominator of the Basel III leverage ratio.  Davis Polk’s visual memorandum uses diagrams, comparison tables, examples and formulas to illustrate the Basel Committee’s revisions to the Basel III leverage ratio and potential U.S. implementation issues.

View the Revised Basel III Leverage Ratio Visual Memorandum here (PDF) Read More

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Financial Stability Board Proposes Methodologies for Identifying Non-Bank Non-Insurance Global Systemically Important Financial Institutions

Today, the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) proposed a set of assessment methodologies for identifying non-bank non-insurance global systemically important financial institutions (NBNI G-SIFIs).  The proposal includes a high-level framework for identifying G-SIFIs and implementation approaches that will apply across all NBNI financial entities.  It also includes NBNI financial sector-specific methodologies for (1) finance companies, (2) market intermediaries (e.g., securities broker-dealers), and (3) investment funds.

Complement Existing Methodologies for Identifying G-SIFIs:  According to the FSB and IOSCO, the proposed assessment methodologies for identifying NBNI G-SIFIs complement the existing methodologies for identifying global systemically important banks (G-SIBs) and global systemically important insurers (G-SIIs). …  Read More

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Financial Stability Board Updates List of Global Systemically Important Banks (G-SIBs); Basel Committee Releases Data Relating to Methodology for Identifying G-SIBs

Today, the Financial Stability Board (FSB) published its annual update to the list of global systemically important banks (G-SIBs).  The updated list is based on 2012 data and the revised assessment methodology for identifying G-SIBs issued by the Basel Committee in July 2013.  Please see below for a blackline of the 2013 list of G-SIBs against the 2012 list.

Data relating to G-SIB Assessment Methodology for Identifying G-SIBs:  In its revised assessment methodology for identifying G-SIBs, the Basel Committee announced that it will bring forward by one year to November 2013 the publication of the denominators used to calculate banks’ G-SIB scores, as well as the cut-off score and thresholds used to identify G-SIBs and allocate them to different G-SIB capital surcharge buckets. …  Read More

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Basel Committee Updates Assessment Methodology for Global Systemically Important Banks (G-SIBs) and Introduces Disclosure Requirements

Today, the Basel Committee made certain revisions to its assessment methodology for identifying and assigning capital surcharges to global systemically important banks (G-SIBs).  The Basel Committee also introduced public disclosure requirements for large banks with respect to the 12 indicators used in the assessment methodology.  The original assessment methodology for G-SIBs was published by the Basel Committee in November 2011.

Background on Basel Committee’s G-SIB Framework:  The assessment methodology for G-SIBs is based on an indicator-based approach and comprises five broad categories: size; interconnectedness; lack of readily available substitutes or financial institution infrastructure; global (cross-jurisdictional) activity; and complexity.…  Read More

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