United States

Topic: Capital adequacy

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FINRA issues guidance on liquidity risks

The Financial Industry Regulatory Authority (“FINRA”) has issued Regulatory Notice 15-33, which provides guidance on prudent practices that broker-dealers should consider and implement in order to effectively manage liquidity.  In its notice, FINRA stressed that failure to manage liquidity has contributed to firm failures as well as wide spread systemic crises. The notice described a review … Continue Reading

Federal Reserve Board finalizes additional capital surcharge rules for largest US bank holding companies

On July 20, 2015, the Federal Reserve Board issued a final rule imposing an additional capital surcharge on the largest US bank holding companies. This additional capital surcharge would be in addition to the capital conservation buffer already required under existing bank holding company capital requirements, and would be applicable to those bank holding companies … Continue Reading

Federal Reserve proposes state and municipal bonds for LCR eligibility

In September 2014, the US federal banking regulators finalized the Liquidity Coverage Ratio (LCR) rules. On May 28, 2015, the Federal Reserve Board published proposed rules to allow additional liquid assets to be used to meet the ratio. Comments will be accepted on the proposed rule through July 24, 2015. The LCR requires that certain … Continue Reading

Federal Reserve Board expands applicability of its Small Bank Holding Company Policy

  On April 9, 2015, the Federal Reserve Board announced that it was broadening the applicability of its policy on the formation and expansion of small bank holding companies from $500 million in total consolidated assets to $1 billion, and extending the policy to savings and loan holding companies. The amendments to the policy are … Continue Reading

US bank regulators issue FAQs on the regulatory capital rules

Banking organizations are subject to complex risk-based regulatory capital rules. Some banking organizations may use internal risk management models approved by the relevant regulator; other must use standardized rules set out in the regulations. On April 6, 2015, Frequently Asked Questions were released by the federal banking regulators to assist banking organizations in calculating their … Continue Reading

Proposed changes to bank regulatory capital rules

The Basel Committee of the Bank for International Settlements, a group of the world’s banking regulators, develops international banking standards.  The Basel  Committee again is considering revising the current international risk-based capital requirements. Kathleen A. Scott wrote a recent column in the New York Law Journal that discusses the Basel Committee review process and the … Continue Reading

Statutory change to minimum capital requirements for insurance companies owning banks

Just before the end of 2014, the President signed legislation amending the Dodd-Frank Wall Street Reform and Consumer Protection Act to clarify capital requirements for insurance companies that own banks. On December 18, 2014, the President signed S. 2270, the Insurance Capital Standards Clarification Act of 2014 (Pub. Law No. 113-279). S. 2270 amended section … Continue Reading

Federal Reserve and OCC issue interim rule in light of new resolution stay protocols

On December 30, 2014, the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) published in the Federal Register interim final rules amending their capital, lending limit and liquidity regulations to ensure that they are not affected by the implementation of special resolution regulations in jurisdictions outside the United States and … Continue Reading

Federal Reserve Board proposes additional capital cushion for largest US bank holding companies

On December 18, 2014, the Federal Reserve Board published in the Federal Register a Notice of Proposed Rulemaking that would impose additional capital requirements for the largest and most interconnected US bank holding companies. This surcharge would be in addition to the capital conservation buffer already required under existing bank holding company capital requirements. If … Continue Reading

US banking regulators finalize liquidity coverage ratio rules

On September 3, 2014, the US federal banking regulators (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of Comptroller of the Currency) announced the final adoption of the liquidity coverage ratio for large financial institutions under their supervision. The liquidity coverage ratio, or LCR, requires that covered banking organizations maintain sufficient … Continue Reading

Agencies finalize changes to supplementary leverage ratio requirements

On September 3, 2014, the US banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of Comptroller of the Currency) issued a final rule adjusting the calculation of the supplementary leverage ratio in order to conform to recently adopted recommendations of the Basel Committee of the Bank for International Settlements, … Continue Reading
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