A More Risk-Based Approach to Prudential Standards, Liquidity Management and Resolution Planning
On Nov. 1, 2019, the U.S. federal banking regulators published three final rules for both U.S. banks and non-U.S. banks with banking operations in the United States. In this edition of her International Banking column, Kathleen A. Scott discusses highlights of all three final rules, which all are applicable in some way to non-U.S. banks with banking operations in the United States.
November 18, 2019 at 12:45 PM
11 minute read
On Nov. 1, 2019, the U.S. federal banking regulators (the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC)) published three final rules for both U.S. banks and non-U.S. banks with banking operations in the United States: final regulations issued by the FRB revising the current prudential standards regulatory framework; final regulations issued by all three banking regulators adopting revised liquidity management requirements and final regulations issued by the FRB and FDIC revising the schedule for submission of plans for an orderly resolution by certain financial companies in the event of material financial distress or failure.
This month's column will discuss highlights of all three final rules, which all are applicable in some way to non-U.S. banks with banking operations in the United States.
A Little Background
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), banking organizations (both U.S. banking organizations, and non-U.S. banking organizations with U.S. banking operations) with total consolidated assets of $50 billion or more, became subject to a series of regulatory requirements imposed by the FRB, including stress testing, liquidity risk management, capital buffers, enhanced risk management, and single counterparty credit limits.
In 2018, the $50 billion threshold was raised to $250 billion in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) for various regulatory requirements.
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