On April 15, 2014, the Basel Committee on Banking Supervision issued its finalized counterparty framework for measuring and controlling large exposures. A proposed Federal Reserve Board rule on the same subject, counterparty credit risk, has been pending, with the Federal Reserve Board staff waiting to see the final Basel Standards before finalizing its rule. While the general approaches are similar, there are certain material differences between the two documents regarding the parties subject to the exposure limits, the specific limits and the method of calculation of those limits.

In a July 9, 2014, New York Law Journal column, Kathleen A. Scott, senior counsel in the Norton Rose Fulbright New York Office, discusses the two documents and their differences, and how the Federal Reserve Board may resolve those differences in its final rule on counterparty credit exposure.

To access the column, view “Counterparty Credit Limits – U.S. Regulations, Basel Standards.”