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Home Archive for category "Proposals"
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Fed Governor Tarullo Discusses G-SIB Surcharge Implementation

Today, Federal Reserve Governor Daniel K. Tarullo delivered a speech that, among other things, provided a preview of the forthcoming proposal to implement the GSIB risk-based capital surcharge.

 

While our proposal will use the GSIB risk-based capital surcharge framework developed by the BCBS as a starting point, it will strengthen the BCBS framework in two important respects. First, the surcharge levels for U.S. GSIBs will be higher than the levels required by the BCBS, noticeably so for some firms. Second, the surcharge formula will directly take into account each U.S. Read More

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Overview of Basel Committee’s Pillar 3 Disclosure Proposal

The Basel Committee has published a proposal to significantly revise the Pillar 3 capital disclosure standards for internationally active banks.  By way of background, Pillar 3 of the Basel framework aims to promote market discipline through qualitative and quantitative regulatory disclosure requirements.

The main objectives of today’s proposed changes include further enhancing the comparability and consistency of disclosures (both across time and across banks) and providing greater transparency of banks’ internal capital calculation models and methodologies.

Overall themes.  The new disclosure requirements embody, among others, the following overall themes:

  • Longer and more detailed disclosures. 
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Blackline of Federal Reserve’s Proposed Revisions to Capital Planning and Stress Testing Rules

Today, the Federal Reserve issued a proposal to revise certain aspects of its capital planning and stress testing regulations.  We have prepared a blackline (available here) showing these proposed changes.

Key changes:  The proposal would, among other things:

  • Shift the start date of the capital plan and stress test cycles from October 1 of a calendar year to January 1 of the following calendar year.  A large (≥$50 billion) bank holding company (“BHC“) would be required to submit its capital plan and stress test results to the Federal Reserve by April 5, three months later than under current regulations. 
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Dodd-Frank Concentration Limit on Financial Institution M&A Transactions: Visual Memorandum

The Federal Reserve has issued a proposal to implement the financial sector concentration limit in Section 622 of the Dodd-Frank Act. The concentration limit generally prohibits a financial company from merging or consolidating with, acquiring all or substantially all of the assets of, or otherwise acquiring control of another company if the “liabilities” of the resulting financial company, calculated using methodologies in the proposal, exceed 10% of aggregate financial sector liabilities. We have prepared a visual memorandum (available here) that uses diagrams, formulas, tables and examples to illustrate key aspects of the Federal Reserve’s concentration limit proposal.…  Read More

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Summary and Blackline of OCC’s Proposed Revisions to National Bank and Federal Savings Association Licensing Rules

We have prepared a summary and blackline (available here) of the OCC’s proposed changes to its rules for national banks and federal savings associations relating to policies and procedures for corporate activities and transactions (“licensing rules”).

Background: The Dodd-Frank Act transferred to the OCC all functions of the former Office of Thrift Supervision (OTS) relating to federal savings associations. With a few exceptions, the OCC currently has one set of rules applicable to national banks and another set of rules applicable to federal savings associations, or, where appropriate, to all savings associations.…  Read More

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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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