On May 30, 2018, the Federal Reserve Board approved a notice of proposed rulemaking aimed at simplifying regulations implementing section 13 of the Bank Holding Company Act (12 U.S.C. 1851), also known as the “Volcker Rule” (or the “Rule”). Enacted as part of the Dodd-Frank Act following the financial crisis of 2008, the Volcker Rule … Continue Reading
Today the Federal Reserve issued its semiannual regulatory flexibility agenda for fall 2017, which lists regulatory matters the agency anticipates having under consideration during the period from November 1, 2017 through April 30, 2018. The agenda is notable in two respects. First, the Federal Reserve anticipates issuing, together with the Office of the Comptroller of … Continue Reading
On December 7, 2017, the Federal Reserve announced that it will eliminate the use of the Strength of Support Assessment (or “SOSA” rating) as a supervisory tool. The SOSA rating measures the extent to which a foreign banking organization (“FBO”) is in a position to provide support to its U.S. branches, agencies, and subsidiary banks, … Continue Reading
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
On September 6, 2017, the Federal Reserve System (“FRS”) published a paper that identifies updated strategies and tactics for improving the U.S. payments system. The paper, entitled Strategies for Improving the U.S. Payment System: Federal Reserve Next Steps in the Payments Improvement Journey, refines the strategies set forth in a previous FRS paper, Strategies for … Continue Reading
On August 3, 2017, the Board of Governors of the Federal Reserve System (“Federal Reserve”) released a proposal regarding its supervisory expectations for the boards of directors of bank holding companies, savings and loan holding companies, state member banks, U.S. branches and agencies of foreign banks, and non-bank systemically important financial institutions supervised by the … Continue Reading
This morning, the Office of the Comptroller of the Currency (“OCC”) released a Request for Information (“RFI”) to determine how regulations implementing the Volcker Rule should be revised to better accomplish the purposes of the statute. The OCC’s release notes that the information the agency is soliciting could support revisions to the regulation that are consistent … Continue Reading
On Thursday, July 13, Federal Reserve Chair Janet Yellen testified before the Senate Banking Committee. During this hearing, Chair Yellen stated that the Federal Reserve (the “Fed”) is open to modifying the threshold for designating banks as systematically important financial institutions (“SIFIs”). She reiterated that the Fed would not oppose raising the current asset threshold—which … Continue Reading
On June 27, 2017, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) proposed revisions to their Call Report forms for insured depository institutions. The proposed changes are intended to align Call Reports with a recent accounting change and … Continue Reading
Federal financial agencies are taking steps to reevaluate the Volcker Rule as part of the Trump Administration’s review of financial regulations. In a May 8, 2017 meeting of the Financial Stability Oversight Council, Treasury Secretary Steve Mnuchin reportedly directed the five agencies responsible for the Volcker Rule – the Board of Governors of the Federal … Continue Reading
On Friday, April 21, President Donald Trump signed two presidential memoranda, directing the Secretary of the Treasury (the “Secretary”), Steve Mnuchin, to review two major provisions of the Dodd-Frank Act: orderly liquidation authority (“OLA”) for financial companies under Title II, and the decision-making processes of the Financial Stability Oversight Council (“FSOC”). Consistent with the Trump … Continue Reading
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
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
Today, both the Federal Reserve and the Office of the Comptroller of the Currency (“OCC”) published guidance addressing the agencies’ “expectations for compliance” with minimum variation margin requirements for non-cleared swaps that become effective March 1, 2017. The guidance is relevant to any swap dealer registered with the Commodity Futures Trading Commission (“CFTC”) for which … Continue Reading
On December 14, 2016, House Freedom Caucus Chairman Mark Meadows released a special report (the “Report”) detailing over 200 rules, regulations, and executive orders the Caucus recommends that President-Elect Donald Trump should examine, revoke, or issue in his first 100 days in office. The report targets for repeal a diverse set of regulations finalized or … Continue Reading
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
Yesterday, the Federal banking agencies issued final rules that permanently extend the examination cycle, from 12 months to 18 months, for well-capitalized and well-managed banks, savings associations, and Federal agencies and branches of foreign banks with less than $1.0 billion in total assets. The final rules, which implement a Congressional mandate under a 2015 statute, … Continue Reading
The Federal Reserve Board released a staff research paper on Monday, December 5, 2016, addressing the potential use of distributed ledger technology (DLT) in payments, clearing, and settlement (PCS) processes. A distributed ledger is a type of database in which identical copies of information are distributed and maintained among multiple parties or multiple nodes in … Continue Reading
On Tuesday, the Government Accountability Office (“GAO”) issued a report to the House Financial Services Committee (the “Report”) regarding stress tests conducted by the Board of Governors of the Federal Reserve System (the “Fed”). The Report grew out of a 2014 request from Rep. Jeb Hensarling, Chairman of the House Financial Services Committee, for the … Continue Reading
The transition to a new administration with the election of Republican Donald J. Trump as President, along with continued Republican control of the Senate and House of Representatives, promises to bring change to each of the federal financial regulatory agencies. Changes in leadership at the federal financial regulatory agencies will likely result in changes in … Continue Reading
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
Earlier today, Federal Reserve Governor Lael Brainard gave a speech at the annual meeting of the Institute of International Finance on distributed ledger technology. She noted that the Federal Reserve has created a working group to conduct a 360-degree analysis of financial innovation, including the impact that distributed ledger technologies may have on payment, clearing, … Continue Reading
