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Home Archive for category "Leverage Ratios" (Page 2)
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Federal Reserve to Vote on U.S. Basel III Supplementary Leverage Ratio (SLR) Rules

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

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Basel Committee Chairman Addresses Calibration of Basel III Leverage Ratio

Basel Committee Chairman Stefan Ingves has delivered a speech discussing the Basel III leverage ratio and its role in the Basel framework, noting that while the Basel Committee has recently agreed on a common measure of bank leverage, the issue of calibration (i.e., the percentage level of the leverage ratio) is still open.  Significantly, Chairman Ingves stated that “[e]ven though the leverage ratio has been designed as a backstop, it must be a meaningful backstop if it is to serve its intended purpose.”  In this respect, Chairman Ingves noted the following in his speech:

  • “Only now that we have an agreed [measure of leverage] can the [Basel] Committee begin to turn to the issue of calibration, and the relationship of the leverage ratio to the risk-based framework.
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Visual Summaries of Final Dodd-Frank Enhanced Prudential Standards

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.

Visual Summary for U.S. BHCs >>

Visual Summary for Foreign Banks >> Read More

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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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Basel Committee Chairman Discusses Next Steps for the Basel Committee

Basel Committee Chairman Stefan Ingves has delivered a speech discussing the Basel Committee’s policy agenda over the next year, noting that “there is still a lot on the Committee’s plate – at last count, a total of around 50 projects.”  Among other topics, Chairman Ingves discussed the variation of risk-weighted assets (RWAs) among banks and potential policy responses.

The Basel Committee has published three studies on the variation of RWAs among banks – two for the trading book (our earlier blog post on this topic is available here) and one for the banking book (our earlier blog post on this topic is available here). …  Read More

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