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Federal Reserve Proposes to Increase Stress Test Transparency

On December 7, 2017, the Federal Reserve released three proposals that would increase the transparency of its stress test exercises, including the Dodd-Frank Act Stress Tests (“DFAST”) and Comprehensive Capital Analysis and Review (“CCAR”).  The proposals are comprised of: (1) enhancements to the Federal Reserve’s disclosures regarding its stress test models, (2) amendments to the … Continue Reading

Treasury Issues Regulatory Reform Recommendations for Banking Industry

On June 12, 2017, the U.S. Department of the Treasury released the first of a series of reports recommending regulatory reforms to the financial system consistent with President Trump’s Core Principles for Regulating the United States Financial System.  Treasury’s first report focuses on the regulatory framework governing the depository system.  Notably, a substantial portion of … Continue Reading

FASB Announces Public Meeting as New Credit Loss Standard’s Effective Dates Approach

The Financial Accounting Standards Board (“FASB”) will hold an open meeting on June 12, 2017, to hear concerns from financial institutions regarding FASB’s recently finalized Accounting Standards Update for measuring credit losses on financial instruments (the Current Expected Credit Loss standard, or “CECL”) under Generally Accepted Accounting Principles (“GAAP”). FASB issued the new CECL standard … Continue Reading

Bipartisan Bills Providing Regulatory Relief to Community and Midsize Banks Emerge in Senate

Senators Jon Tester, D-Mont., and Jerry Moran, R-Kan., introduced a bill today (S. 1139) that would raise the threshold for a banking organization to be subject to Dodd-Frank Act Stress Tests (DFAST) to $50 billion in total consolidated assets from the current $10 billion threshold.  The bill, titled the Main Street Regulatory Fairness Act, would … Continue Reading

CHOICE Act 2.0: House Financial Services Committee Revises Regulatory Reform Bill

On April 19, 2017, the House Financial Services Committee released a new discussion draft of the Financial CHOICE Act, its comprehensive regulatory reform bill.  The Committee released the first version of the CHOICE Act in June 2016.  Buoyed by the election of a Republican president, and following several months of public and industry outreach, Committee … Continue Reading

Governor Tarullo Outlines Path to Regulatory Relief in Final Speech as Federal Reserve Board Member

On April 4, 2017, Federal Reserve Board Governor Daniel K. Tarullo gave his final speech as a governor before his departure from the Board the next day.  Governor Tarullo, widely considered the “most influential Wall Street regulator” during his term as governor, took the lead for the Federal Reserve in developing the agency’s most significant … Continue Reading

Basel Committee Proposes Use of Short-Term Wholesale Funding Indicator in G-SIB Surcharge Methodology

On March 30, 2017, the Basel Committee on Banking Supervision (“BCBS”) issued a consultative document to revise the methodology it uses to measure the systemic importance of internationally active banks.  The BCBS methodology incorporates various quantitative indicators of a bank’s “Cross-Jurisdictional Activity,” “Size,” “Interconnectedness,” “Substitutability,” and “Complexity” to arrive at a single score of each … Continue Reading

Federal Reserve Issues Final Standard for Long-Term Debt, Total Loss Absorbing Capacity, and Clean Holding Company Requirements for Largest Banking Organizations

On December 15, 2016, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued a final rule requiring global systemically important banking organizations (“G-SIBs”) to issue minimum amounts of “plain vanilla” unsecured long-term debt and total loss-absorbing capacity (“TLAC”) instruments, and to maintain so-called “clean” holding companies that have no “runnable” liabilities. … Continue Reading

Basel Committee Specifies Regulatory Capital Treatment of TLAC Holdings

Today, the Basel Committee on Banking Supervision issued its final standard on the regulatory capital treatment of banking organizations’ holdings of Total Loss Absorbing Capacity (“TLAC”) and related instruments issued by global systemically important banking organizations (“G-SIBs”).  The final standard has important implications for the marketability and liquidity of TLAC and other instruments that G-SIBs … Continue Reading
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